Business Loan Agreement, dated 12/5/05



 EXHIBIT 10.2 
  
 BUSINESS LOAN AGREEMENT (ASSET BASED) 
  

															
	Principal

	  	Loan Date

	  	Maturity

	  	Loan No.

	  	Call/Coll

	  	Account

	  	Officer

	  	Initials


	$900,000.00	  	12-05-2005	  	12-05-2006	  	14749501	  	4A/420	  	 	  	JBM	  	 

  
 References in the
shaded area are for Lender’s use only and do not limited the applicability of this document to any 
 particular loan or item. Any item
above containing “***” has been omitted due to text length limitations. 
  

							
	Borrower:	  	 Royal BodyCare, Inc.
 2301 Crown
Court
 Irving, TX 75038-4305
	  	Lender:        	  	 Summit Bank N.A.
 Euless
 350 Westpark Way, Suite 202
 Euless, TX
76040

				
	Principal Amount:	  	$900,000.00	  	 	  	Date of Note: December 5, 2005

  
 THIS BUSINESS LOAN AGREEMENT (ASSET
BASED) dated December 5, 2005, is made and executed between ROYAL BODYCARE, INC. (“Borrower”) and SUMMIT BANK N.A. (“Lender”) on the following terms and conditions. Borrower has received prior commercial loans from Lender or
has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement (“Loan”). Borrower understands and agrees that:
(A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by Lender at all
times shall be subject to Lender’s sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement. 
  
 TERM. This Agreement shall be effective as of December 5, 2005, and shall continue in full force and effect until such time as
all of Borrower’s Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this
Agreement. 
  
 LINE OF CREDIT. Lender agrees to make Advances to Borrower
from time to time from the date of this Agreement to the Expiration Date, provided the aggregate amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or
wholly prepay, and reborrow under this Agreement as follows: 
  
 Conditions Precedent to Each Advance. Lender’s obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following conditions precedent, with all documents, instruments, opinions,
reports, and other items required under this Agreement to be in form and substance satisfactory to Lender: 
  

	 	(1)	Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to Lender. 


 

	 	(2)	Lender shall have received such opinions of counsel, supplemental opinions, and documents as Lender may request. 

  

	 	(3)	The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force and effect.


  

	 	(4)	All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to Lender, and be in full force and effect.


  

	 	(5)	Lender, at its option and for its sole benefit, shall have conducted an audit of Borrower’s Inventory, books, records, and operations, and Lender shall be satisfied as to their
condition. 

  

	 	(6)	Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable. 

  

	 	(7)	There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the
compliance certificate called for in the paragraph below titled “Compliance Certificate.” 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Making Loan Advances. Advances under this credit facility, as well as directions for payment
from Borrower’s accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the request
of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in accordance with the instructions of an authorized person. Lender, at its option, may set a cutoff time,
after which all requests for Advances will be treated as having been requested on the next succeeding Business Day. 
  
 Mandatory Loan Repayments. If at any time the aggregate principal amount of the outstanding Advances shall exceed the applicable Borrowing Base,
Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding principal balance of the Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to
Lender in full the aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs and charges, if any, not yet paid. 
  
 Loan Account. Lender shall maintain on its books a record of account
in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic statements of Borrower’s account, which statements
shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower’s receipt of such statement which Borrower deems to be incorrect. 
  
 COLLATERAL. To secure payment of the Primary Credit Facility and performance of all
other Loans, obligations and duties owed by Borrower to Lender, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may require. Lender’s Security Interests in the Collateral shall
be continuing liens and shall include the proceeds and products of the Collateral, including without limitation the proceeds of any insurance. With respect to the Collateral, Borrower agrees and represents and warrants to Lender: 
  
 Perfection of Security Interests. Borrower agrees to execute all
documents perfecting Lender’s Security Interest and to take whatever actions are requested by Lender to perfect and continue Lender’s Security Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender any and all
of the documents evidencing or constituting the Collateral, and Borrower will note Lender’s interest upon any and all chattel paper and instruments if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this
Agreement, Borrower will execute one or more UCC financing statements and any similar statements as may be required by applicable law, and Lender will file such financing statements and all such similar statements in the appropriate location or
locations. Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to continue any Security Interest. Lender may at any time, and without further authorization from
Borrower, file a carbon, photograph, facsimile, or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse Lender for all expenses for the perfection, termination, and the continuation of the
perfection of Lender’s security interest in the Collateral. Borrower promptly will notify Lender before any change in Borrower’s name including any change to the assumed business names of Borrower. Borrower also promptly will notify Lender
before any change in Borrower’s Social Security Number or Employer Identification Number. Borrower further agrees to notify Lender in writing prior to any change in address or location of Borrower’s principal governance office or should
Borrower merge or consolidate with any other entity. 
  
 Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records shall be available to Lender or Lender’s representative upon demand for
inspection and copying at any reasonable time. With respect to the Inventory, Borrower agrees to keep and maintain such records as Lender may require, including without limitation information concerning Eligible Inventory and records itemizing and
describing the kind, type, quality, and quantity of Inventory, Borrower’s Inventory costs and selling prices, and the daily withdrawals and additions to Inventory. Records related to Inventory are or will be located at . The above is an
accurate and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower’s collateral. 
  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Collateral Schedules. Concurrently with the execution and delivery of this Agreement, Borrower
shall execute and deliver to Lender schedules of Inventory and schedules of Eligible Inventory in form and substance satisfactory to the Lender. Thereafter supplemental schedules shall be delivered according to the following schedule: 
  
 Representations and Warranties Concerning Inventory. With respect to
the Inventory, Borrower represents and warrants to Lender: (1) All Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of Eligible Inventory; (2) All
Inventory values listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; (3) The value of the Inventory will be determined on a consistent accounting basis; (4) Except as agreed to the contrary by
Lender in writing, all Eligible Inventory is now and at all times hereafter will be in Borrower’s physical possession and shall not be held by others on consignment, sale on approval, or sale or return; (5) Except as reflected in the
Inventory schedules to Lender, all Eligible Inventory is now and at all times hereafter will be of good and merchantable quality, free from defects; (6) Eligible Inventory is not now and will not at any time hereafter be stored with a bailee,
warehouseman, or similar party without Lender’s prior written consent, and, in such event, Borrower will concurrently at the time of bailment cause any such bailee, warehouseman, or similar party to issue and deliver to Lender, in form
acceptable to Lender, warehouse receipts in Lender name evidencing the storage of Inventory; and (7) Lender, its assigns, or agents shall have the right at any time and at Borrower’s expense to inspect and examine the Inventory and to
check and test she same as to quality, quantity, value, and condition. 
  
 CONDITIONS PRECEDENT TO EACH ADVANCE. Lender’s obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to Lender’s satisfaction of all of the conditions
set forth in this Agreement and in the Related Documents. 
  
 Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all
other documents perfecting Lender’s Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance
satisfactory to Lender and Lender’s counsel. 
  
 Borrower’s Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related
Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require. 
  

Fees and Expenses Under This Agreement. Borrower shall have paid to Lender all fees, costs, and expenses specified in this Agreement and the
Related Documents as are then due and payable. 
  
 Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct. 

 
 No Event of Default. There shall not exist at the time of any
Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. 
  
 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds,
as of the date of renewal, extension or modification of any Loan, and at all times any Indebtedness exists: 
  
 Organization. Borrower is a corporation for profit which is, and at all times shall be, duly organized, validly existing, and in good standing
under and by virtue of the laws of the State of Nevada. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having obtained all necessary filings, governmental licenses and approvals for each
state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure to so qualify would have a material adverse effect on its business or
financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. Borrower maintains an office at 2301 CROWN CT, IRVING, TX 75038-4305.
Unless Borrower has designated 

  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 
otherwise in writing, the principal office is the office at which Borrower keeps its books and records including its records concerning the Collateral.
Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or any change in Borrower’s name. Borrower shall do all things necessary to preserve and to keep in full force and effect its existence,
rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities. 
  
 Assumed Business Names. Borrower has filed or recorded all documents
or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: 
  

							
	 Borrower

	  	Assumed Business Name

	  	Filing Location

	  	Date


	ROYAL BODYCARE, INC.	  	RBC LIFE SCIENCES, INC.	  	 	  	 

  
 Authorization.
Borrower’s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under
(1) any provision of (a) Borrower’s articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order
applicable to Borrower or to Borrower’s properties. 
  
 Financial Information. Each of Borrower’s financial statements supplied to Lender truly and completely disclosed Borrower’s financial condition as of the date of the statement, and there has been no material adverse change
in Borrower’s financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. 
  
 Legal Effect. This Agreement constitutes, and any instrument or
agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. 
  
 Properties. Except as contemplated by this Agreement or as previously
disclosed in Borrower’s financial statements or in writing to Lender and as accepted by Lender, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower’s properties
free and clear of all Security Interests, and has not executed any security documents or financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or filed
a financing statement under any other name for at least the last five (5) years. 
  
 Hazardous Substances. Except as disclosed to and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower’s ownership of the Collateral, there has
been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe
that there has been (a) any breach or violation of any Environmental Laws: (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral
by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized
user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable
federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem
appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower’s due diligence in investigating the Collateral for hazardous waste and Hazardous
Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold
harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use,
generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance 

  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 
on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness and
the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. 
  
 Litigation and Claims. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties, other
than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by Lender in writing. 
  
 Taxes. To the best of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or were required to be filed, have been
filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

  
 Lien Priority. Unless otherwise previously disclosed
to Lender in writing, Borrower has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of
Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s Security Interests and rights in and to such Collateral. 
  

Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as
well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms. 
  
 AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in effect, Borrower will: 
  
 Notices of Claims and Litigation. Promptly inform Lender in writing
of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which
could materially affect the financial condition of Borrower or the financial condition of any Guarantor. 
  
 Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times. 
  
 Financial Statements. Furnish Lender with the following: 
  
 Annual Statements. As soon as available, but in no event later than ninety (90) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, audited by a
certified public accountant satisfactory to Lender. 
  
 Interim Statements. As soon as available, but in no event later than 45 days after the end of each fiscal quarter, Borrower’s balance sheet and profit and loss statement for the period ended, prepared by Borrower. 
  
 Additional Requirements. INVENTORY LISTINGS DUE MONTHLY. 

 
 All financial reports required to be provided under this Agreement shall
be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct. 
  
 Additional Information. Furnish such additional information and statements, as Lender may request from time to time. 
  
 Financial Covenants and Ratios. Comply with the following covenants
and ratios: 
  
 Working Capital Requirements. Borrower
shall comply with the following working capital ratio requirements: 
  
 Current Ratio. Maintain a Current Ratio in excess of 0.800 to 1.000. The term “Current Ratio” means Borrower’s total Current Assets divided by Borrower’s total Current Liabilities. This liquidity
ratio will be evaluated as of quarter-end. 
  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Minimum Income and Cash flow Requirements. Borrower shall comply with the following cash flow
ratio requirements: 
  
 Cash Flow / Current Maturity (LTD)
Ratio. Maintain a ratio of Cash Flow / Current Maturity (LTD) in excess of 1.300 to 1.000. The ratio “Cash flow / Current Maturity (LTD)” means Borrower’s Net Profits plus Depreciation, Depletion and Amortization
divided by Borrower’s Current Portion of Long Term Indebtedness. This coverage ratio should be maintained at all times and may be evaluated at any time. 
  

Tangible Net Worth Requirements. Maintain a minimum Tangible Net Worth of not lees than: $1,500,000.00. 
  
 Except as provided above, all computations made to determine compliance
with the requirements contained in this paragraph shall be made in accordance with generally accepted accounting principles, applied on a consistent basis, and certified by Borrower as being true and correct. 
  
 Insurance. Maintain fire and other risk insurance, public liability
insurance, and such other insurance as Lender may require with respect to Borrower’s properties and operations, in form, amounts, and coverages reasonably acceptable to Lender and by insurance companies authorized to transact business in Texas.
BORROWER MAY FURNISH THE INSURANCE REQUIRED BY THIS AGREEMENT WHETHER THROUGH EXISTING POLICIES OWNED OR CONTROLLED BY BORROWER OR THROUGH EQUIVALENT COVERAGE FROM ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS IN TEXAS. Borrower, upon
request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least thirty (30) days
prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with
all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may require. 
  
 Insurance Report. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) I the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the
properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however
not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

  
 Guaranties. Prior to disbursement of any Loan
proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender’s forms, and in the amounts and under the conditions set forth in those guaranties. 
  

			
	 Names of Guarantors

	  	 Amounts


	MPM MEDICAL, INC.	  	Unlimited
	CLINTON H. HOWARD	  	Unlimited
	 RBC LIFE SCIENCES USA, INC. F.K.A.
 ROYAL
BODYCARE USA, INC.
	  	Unlimited

  
 Other
Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such
agreements. 
  
 Loan Proceeds. Use all Loan proceeds
solely for Borrower’s business operations, unless specifically consented to the contrary by Lender in writing. 
  
 Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits. 
  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

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

  
 Operations. Maintain executive and management
personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable
and prudent manner. 
  
 Environmental Studies. Promptly
conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as
toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or effecting any property or any facility owned, leased or used by Borrower. 
  
 Compliance with Governmental Requirements. Borrower shall promptly
comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s properties, businesses and operations, and to the use or occupancy of the Collateral,
including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has
notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion, Lender’s interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender’s interest. 
  
 Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s other properties and to examine or audit Borrower’s books, accounts, and records
and to make copies and memoranda of Borrower’s books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the
generation of such records) in the possession of a third party, Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may
request, all at Borrower’s expense. 
  
 Compliance
Certificates. Unless waived in writing by Lender, provide Lender within fifteen (15) days after the end of each month, with a certificate executed by Borrower’s chief financial officer, or other officer or person acceptable to Lender,
certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.

  
 Environmental Compliance and Reports. Borrower shall
comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower’s part or on the part of any third party, on property owned and/or occupied
by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental
authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality
concerning any intentional or unintentional action or omission on Borrower’s part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources. 
  
 Additional Assurances. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all
Security Interests. 
  
 LENDER’S EXPENDITURES. If any action or
proceeding is commenced that would materially affect Lender’s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to
discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate,
including but not limited to discharging or paying all taxes, liens, security interests, encumbrance, and other claims, at any time levied or placed on any Collateral and 

  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 
paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures paid by Lender for such purposes will then bear interest at
the Note rate from the date paid by Lender to the date of repayment by Borrower. To the extent permitted by applicable law, all such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand;
(B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or
(C) be treated as a balloon payment which will be due and payable at the Note’s maturity. 
  
 NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender: 
  
 Indebtedness and Liens. (1) Except for trade debt incurred in
the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume additional indebtedness for borrowed money, including capital leases, in excess of the aggregate amount of $100,000.00,
(2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower’s assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower’s accounts, except to
Lender. 
  
 Continuity of Operations. (1) Engage in
any business activities substantially different than those in which Borrower is presently engaged, (2) cease operations, liquidate, merge, transfer, acquire or consolidate with any other entity, change its name, dissolve or transfer or sell
Collateral out of the ordinary course of business, or (3) pay any dividends on Borrower’s stock (other than dividends payable in its stock), provided, however that notwithstanding the foregoing, but only so long as no Event of Default has
occurred and is continuing or would result from the payment of dividends, if Borrower is a “Subchapter S Corporation” (as defined in the Internal Revenue Code of 1986, as amended), Borrower may pay cash dividends on its stock to its
shareholders from time to time in amounts necessary to enable the shareholders to pay income taxes and make estimated income tax payments to satisfy their liabilities under federal and state law which arise solely from their status as Shareholders
of a Subchapter S Corporation because of their ownership of shares of Borrower’s stock, or purchase or retire any of Borrower’s outstanding shares or alter or amend Borrower’s capital structure. 
  
 Agreements. Borrower will not enter into any agreement containing any
provisions which would be violated or breached by the performance of Borrower’s obligations under this Agreement or in connection herewith. 
  
 CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have
no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with
Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial
condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s guaranty of the Loan or any
other loan with Lender. 
  
 RIGHT OF SETOFF. To the extent permitted by
applicable law, Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open
in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on
the Indebtedness against any and all such accounts. 
  
 DEFAULT. Each of
the following shall constitute an Event of Default under this Agreement: 
  
 Payment Default. Borrower fails to make any payment when due under the Loan. 
  
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any
of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
  

 Page 8 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension
of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s or any Grantor’s property or Borrower’s or any Grantor’s
ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents. 
  
 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this
Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 
  
 Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of
Borrower, the appointment of a receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against
Borrower. 
  
 Defective Collateralization. This Agreement
or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 
  
 Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of
Borrower’s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or
forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole
discretion, as being an adequate reserve or bond for the dispute. 
  
 Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any
Guaranty of the Indebtedness. 
  
 Change in Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock of Borrower. 
  
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance
of the Loan is impaired. 
  
 Insecurity. Lender in good
faith believes itself insecure. 
  
 EFFECT OF AN EVENT OF DEFAULT. If any
Event of Default shall occur, except where otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate
(including any obligation to make further Loan Advances or disbursements), and, at Lender’s option, all lndebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of
Default of the type described in the “lnsolvency” subsection above, such acceleration shall be automatic and not optional. In addition, Lender shall have all the rights and remedies provided in the Related Documents or available at law, in
equity, or otherwise. Except as may be prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of
any other remedy, and an election to make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not effect Lender’s right to declare a default and to exercise its rights and remedies. 
  
 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this
Agreement: 
  
 Amendments. This Agreement, together with
any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or amendment. 
  

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 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of Lender’s costs
and expenses, including Lender’s reasonable attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help enforce this Agreement, and Borrower
shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a lawsuit, including Lender’s reasonable attorneys’ fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and such additional fees as may be
directed by the court. 
  
 Caption Headings. Caption
headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. 
  
 Consent to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer, whether now or later, of one or more participation
interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or knowledge Lender may have
about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of participation interests, as
well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan and will have all the rights
granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or against any purchaser of such a
participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in the Loan. Borrower further agrees
that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. 
  
 Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by
federal law, the laws of the State of Texas without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of Texas. 
  
 Choice of Venue. If there is a lawsuit, and if the transaction evidenced by this Agreement occurred in TARRANT
County, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of TARRANT County, State of Texas. 
  
 No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by
Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver
of any of Lender’s rights or of any of Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance
shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 
  
 Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when
actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or
registered mail postage prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving formal written notice to the other parties, specifying that the
purpose of the notice is to change the party’s address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower’s current address. Unless otherwise provided or required by law, if there is more than one
Borrower, any notice given by Lender to any Borrower is deemed to be notice given to all Borrowers. 
  

 Page 10 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Payment of Interest and Fees. Notwithstanding any other provision of this Agreement or any
provision of any Related Document, Borrower does not agree or intend to pay, and Lender does not agree or intend to charge, collect, take, reserve or receive (collectively referred to herein as “charge or collect”), any amount in the
nature of interest or in the nature of a fee for the Loan which would in any way or event (including demand, prepayment, or acceleration) cause Lender to contract for, charge or collect more for the Loan than the maximum Lender would be permitted to
charge or collect by any applicable federal or Texas state law. Any such excess interest or unauthorized fee will, instead of anything stated to the contrary, be applied first to reduce the unpaid principal balance of the Loan, and when the
principal has been paid in full, be refunded to Borrower. 
  
 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 
  
 Subsidiaries and Affiliates of Borrower. To the extent the context of
any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates. 
  
 Successors and Assigns. All covenants and agreements by or on behalf
of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign
Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender. 
  
 Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any
investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower
at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last
to occur. 
  
 Time is of the Essence. Time is of the
essence in the performance of this Agreement. 
  
 DEFINITIONS. The
following capitalized words and terms shall have the following meanings when used in this Agreement. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America.
Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the
Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement: 

 
 Advance. The word “Advance” means a disbursement of Loan
funds made, or to be made, to Borrower or on Borrower’s behalf under the terms and conditions of this Agreement. 
  
 Agreement. The word “Agreement” means this Business Loan Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be
amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset Based) from time to time. 
  
 Borrower. The word “Borrower” means ROYAL BODYCARE, INC. and includes all co-signers and co-makers signing the Note and all their
successors and assigns. 
  

 Page 11 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Borrowing Base. The words “Borrowing Base” mean See Exhibit A. 
  
 Business Day. The words “Business Day” mean a day on which
commercial banks are open in the State of Texas. 
  
 Collateral. The word “Collateral” means all property and assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale,
trust receipt, lien, charge, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. The word Collateral also includes
without limitation all collateral described in the Collateral section of this Agreement. 
  
 Eligible Inventory. The words “Eligible Inventory” mean, at anytime, all of Borrower’s Inventory as defined below, except: 
  

	 	(1)	Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties. 

  

	 	(2)	Inventory which Lender, in its sole discretion, deems to be obsolete, unsalable, damaged, defective, or unfit for further processing. 

  
 Environmental Laws. The words “Environmental Laws” mean any
and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. 
  
 Event of Default. The words “Event of Default” mean any of the events of default set forth in this
Agreement in the default section of this Agreement. 
  
 Expiration Date. The words “Expiration Date” mean the date of termination of Lender’s commitment to lend under this Agreement. 
  

GAAP. The word “GAAP” means generally accepted accounting principles. 
  
 Grantor. The word “Grantor” means each and all of the persons or entities granting a Security Interest in
any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. 
  
 Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan. 
  
 Guaranty. The word “Guaranty” means the guaranty from
Guarantor to Lender, including without limitation a guaranty of all or part of the Note. 
  
 Hazardous Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or
potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances” are used in their very broadest sense and
include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum and petroleum
by-products or any fraction thereof and asbestos. 
  
 Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is
responsible under this Agreement or under any of the Related Documents. 
  

 Page 12 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 Inventory. The word “Inventory” means all of Borrower’s raw materials, work in
process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether held by Borrower or
others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type covering all or any part of the foregoing. Inventory includes inventory temporarily out of Borrower’s custody or possession and all
returns on Accounts. 
  
 Lender. The word
“Lender” means SUMMIT BANK N.A., its successors and assigns. 
  
 Loan. The word “Loan” means any and all loans and financial accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial
accommodations described herein or described on any exhibit or schedule attached to this Agreement from time to time. 
  
 Note. The word “Note” means the Note executed by ROYAL BODYCARE, INC. in the principal amount of $900,000.00 dated December 5, 2005,
together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement. 
  
 Permitted Liens. The words “Permitted Liens” means (1) liens and security interests securing Indebtedness owed by Borrower to
Lender; (2) liens for taxes, assessments, or similar charges either not yet due or being contested in good faith; (3) liens of materialmen, mechanics, warehousemen, or carriers, or other like liens arising in the ordinary course of
business and securing obligations which are not yet delinquent; (4) purchase money lien, or purchase money security interests upon or in any property acquired or held by Borrower in the ordinary course of business to secure indebtedness
outstanding on the data of this Agreement or permitted to be incurred under the paragraph of this Agreement titled “Indebtedness and Liens”; (5) liens and security interests which, as of the date of this Agreement, have been disclosed
to and approved by the Lender in writing; and (6) those liens and security interests which in the aggregate constitute an immaterial and insignificant monetary amount with respect to the net value of Borrower’s assets. 
  
 Primary Credit Facility. The words “Primary Credit
Facility” mean the credit facility described in the Line of Credit section of this Agreement. 
  
 Related Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan. 
  
 Security Agreement. The words “Security Agreement” mean and
include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 
  
 Security Interest. The words “Security Interest” mean,
without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by
law, contract, or otherwise. 
  
 Tangible Net Worth. The
words “Tangible Net Worth” mean Borrower’s total assets excluding all intangible assets (i.e., goodwill, trademarks, patents, copyrights, organizational expenses, and similar intangible items, but including leaseholds and leasehold
improvements) less total debt. 
  

 Page 13 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER
AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED DECEMBER 5, 2005. 
  

			
	BORROWER:
	
	ROYAL BODYCARE, INC.
		
	 By:
	 	/s/    STEVEN E. BROWN        
	 	 	STEVEN E. BROWN, VICE PRESIDENT – FINANCE of
	 	 	ROYAL BODYCARE. INC.
	
	LENDER:
	
	SUMMIT BANK N.A.
		
	 By:
	 	/s/    GARY GREEN        
	 	 	Authorized Signer

  

 Page 14 









 BUSINESS LOAN AGREEMENT (ASSET BASED) 
 (Continued) 
  

 EXHIBIT “A” 
  
 Royal BodyCare, Inc. 
 Borrowing Base 
  

				
	 US Inventory:

	  	Advance rate

	 
	 RBC Inventory
	  	 	 
	 Skin and personal care
	  	50	%
	 Nutritional supplements
	  	50	%
	 Product packs
	  	0	%
	 Sales aids
	  	15	%
	 Finished goods held for CCI
	  	0	%
	 Total finished goods
	  	 	 
	 Bulk tablets/capsules
	  	50	%
	 Raw materials
	  	15	%
	 Total bulk and raw materials
	  	 	 
	 Packaging materials
	  	15	%
	 Labels
	  	0	%
	 Total packaging materials
	  	 	 
		
	 MPM Inventory
	  	 	 
	 Oncology
	  	50	%
	 Wound care
	  	50	%
	 Total finished goods
	  	 	 
	 Bulk product and raw materials
	  	0	%
	 Packaging materials
	  	15	%
	 Labels
	  	0	%
	 Total packaging materials
	  	 	 
		
	 Canada Inventory
	  	 	 
	 Skin and personal care
	  	50	%
	 Nutritional Supplements
	  	50	%
	 Product packs
	  	0	%
	 Sales aids
	  	15	%
	 Total finished goods
	  	 	 
	 Bulk product and raw materials
	  	 	 
	 Packaging Materials
	  	0	%
	 Labels
	  	0	%
	 Total packaging materials
	  	 	 
	 Equipment
	  	50	%
	 Accounts Receivables
	  	50	%

  

			
	 Borrower:

	
	 Royal BodyCare Inc.

		
	BY:	 	/s/    STEVEN E. BROWN        
	 	 	Steven E Brown,
	 	 	Vice President-Finance of
	 	 	Royal Body Care Inc.

  

 Page 15