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EXHIBIT 10.10

REVOLVING ACCOUNTS RECEIVABLE LOAN

AND LINE OF CREDIT LOAN AGREEMENT

     THIS REVOLVING ACCOUNTS RECEIVABLE LOAN AND LINE OF CREDIT LOAN AGREEMENT
(hereafter referred to as the “Agreement”) is dated as of the 10th day of
February, 2003, by and between Integrated Financial Systems, Inc., a Colorado
Corporation (“Borrower”), and GUARANTY BANK AND TRUST COMPANY (“Lender”).

RECITALS

     A. Borrower is an entity engaged principally in purchasing and servicing
hospital patient accounts.

     B. Borrower has applied to Lender for a revolving accounts receivable loan
in the principal amount of $10,000,000.00 (the “Revolving Accounts Receivable
Loan”) for the purpose of providing funding to support the purchase by Borrower
of hospital patient accounts, such purchases to be made by Borrower in the
ordinary course of its business.

     C. Borrower has applied to Lender for a revolving line of credit loan in
the principal amount of $1,000,000.00 (the “Revolving Line of Credit Loan”) for
the purpose of providing funding for the business services and operations
required to support the Borrower’s ordinary course of business in servicing
hospital patient accounts.

     D. Lender has agreed to provide the Revolving Accounts Receivable Loan and
the Revolving Line of Credit Loan (together referred to herein as the “Loans”)
upon the terms and subject to the conditions set forth herein.

AGREEMENT

     NOW, THEREFORE, in consideration of the covenants and conditions herein
contained, the parties agree as follows:

ARTICLE I

DEFINITIONS

     1.1 Definitions. In addition to terms defined elsewhere herein, as used
herein, the following terms shall have the meanings set forth below:

     “Advance” shall mean any disbursement of proceeds of the Loans to or
on behalf of Borrower at the request of Borrower.

 

 

     “Agreement” shall mean this Revolving Accounts Receivable Loan and
Line of Credit Loan Agreement, as the same may be amended and
supplemented as hereinafter provided.

     “Authorized Representative of Borrower” shall mean the person or
persons designated by Borrower to take any and all actions on the part of
Borrower under any of the Loan Documents.

     “Business Day” shall mean a day of the year other than Saturdays,
Sundays, and legal holidays on which Lender is open.

     “Certificate of Deposit” shall mean that certain certificate of
deposit (or certificates of deposit) purchased by Borrower from Lender
and deposited with and held in the possession of Lender as collateral for
the Revolving Line of Credit Loan, and as cross collateral for the
Revolving Accounts Receivable Loan.

     “Certification of Non-Foreign Status” shall mean an affidavit,
signed under penalty of perjury by an Authorized Representative of
Borrower, stating (a) that Borrower is not a “foreign corporation,”
“foreign partnership,” “foreign trust,” or “foreign estate,” as those
terms are defined in the Internal Revenue Code and the regulations
promulgated thereunder, (b) Borrower’s US employer identification number,
and (c) the address of Borrower’s principal place of business. Such
affidavit shall be consistent with the requirements of the regulations
promulgated under Section 1445 of the Internal Revenue Code, and shall
otherwise be in form and substance acceptable to Lender.

     “Closing Date” shall mean the date upon which Borrower and Lender
execute and deliver this Agreement.

     “Collateral” shall mean, collectively, all of Borrower’s right,
title and interest, whether now owned or hereafter acquired, in and to:
(a) all individual promissory notes, and Consumer Credit Sales Agreements
or similar credit documents (including Exempla Healthcare’s Admission
Payment Information Forms) that are purchased by Borrower in whole or in
part with proceeds of the Revolving Accounts Receivable Loan (hereafter
cumulatively, the “Patient Account Credit Agreements”) other than any of
the foregoing Patient Account Credit Agreements to the extent Borrower
has repaid in full the Advance (and all accrued and unpaid interest
thereon and all fees and penalties, if any, properly associated
therewith) related thereto; (b) all regularly scheduled payments of
principal and interest under such Patient Account Credit Agreements; (c)
all payments for fees and/or penalties, if any, associated with or
arising from the Patient Account Credit Agreements; (d) all insurance and
condemnation proceeds respecting any real property that may be the
subject of Patient Account Credit Agreements; (e) all agreements,
documents and instruments evidencing and/or related to such Patient
Account Credit Agreements, including, without limitation, all deeds of
trust, if any, modifications, waivers and amendments

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relating thereto; (f) all fees from and rights of Borrower in and to all
third party servicing arrangements and agreements related to such Patient
Account Credit Agreements (including, without limitation, those arising
from or related to the Patient Account Purchase Agreement and the Service
Agreement) or related to all third party servicing arrangements and
agreements for any hospital subsequently approved by the Lender for which
Patient Account Credit Agreement purchases are funded by the Revolving
Accounts Receivable Loan; and (g) all Certificates of Deposit.
Collateral includes all of Borrower’s right, title and interest in the
above for any hospital subsequently approved by the Lender for which
Patient Account Credit Agreement purchases are funded by the Revolving
Accounts Receivable Loan.

     “Commercial Security Agreement” shall mean the security agreements
from Borrower to Lender pledging security interests in all of the
Collateral and such security agreements as the Borrower shall execute in
the future with respect to any future Advance from the Revolving Line of
Credit Loan securing interests in certificates of deposit purchased in
the future to secure additional Advances, if any, from the Revolving Line
of Credit Loan.

     “Commitment Letter” shall mean that loan commitment letter from
Lender to Borrower dated December 12, 2002.

     “Consumer Credit Sales Agreement” shall mean that certain form of
credit agreement approved as to form by Lender that Borrower agrees it
shall require hospitals to use as its credit agreement with patients
where patient account purchases are funded by the Revolving Accounts
Receivable Loan, by which patients shall promise and agree to pay any
such hospital for services rendered.

     “Continuing Guaranty” shall mean the Commercial Continuing Guaranty
(or Commercial Continuing Guaranties) executed by each Guarantor.

     “Disbursement” shall mean any disbursement of proceeds of the Loans
to or on behalf of Borrower, irrespective of whether such disbursement
constitutes an Advance.

     “Event of Default” shall mean: (a) the occurrence of any of the
events listed in subsection 7.1(a) and the expiration of any applicable
notice and cure period provided in said subsection; or (b) the occurrence
of any “event of default” under any Loan Document other than this
Agreement; or (c) the occurrence of any “event of default” under any
Related Document.

     “Exempla Healthcare’s Admission Payment Information Form” shall mean
that document signed by patients of Exempla Healthcare at the time of
admission by the terms of which the patient agrees to pay for the
services rendered by the hospital.

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     “Financing Statement” shall mean a UCC financing statement or
statements pertaining to Borrower as debtor, in favor of Lender, as
secured party, in form and substance satisfactory to Lender, for filing
with the Secretary of State of Colorado and any other filing office
necessary or useful for Lender to perfect Lender’s security interest in
the Collateral.

     “Guarantors” shall mean those persons designated in Article III as
parties executing Continuing Guaranties.

     “Initial Account Purchases” shall mean patient accounts purchased
from Exempla Healthcare, Inc. by Borrower pursuant to the Patient Account
Purchase Agreement consisting of accounts where patients have committed
to pay for services provided by Exempla Healthcare, Inc. by signing
Exempla Healthcare’s Admission Payment Information Forms prior to the
date of this Agreement.

     “Lien” shall mean any lien, security interest, charge or encumbrance
of any kind and nature whatsoever.

     “Loan Amount” shall mean the sum of Eleven Million Dollars
($11,000,000.00). Ten Million Dollars ($10,000,000.00) of the Loan
Amount shall be available as the Revolving Accounts Receivable Loan and
One Million Dollars ($1,000,000.00) of the Loan Amount shall be available
as the Revolving Line of Credit Loan.

     “Loan Documents” shall mean the documents described in Article
3.1(a) through (g) hereof.

     “Maturity Date” shall mean, subject to Sections 2.4(b) and 7.2,
fifty-two (52) weeks from the initial Advance unless extended by mutual
agreement of the Lender and Borrower.

     “Notes” or “Line of Credit Notes” shall mean the two promissory
notes executed by Borrower for the benefit of Lender, one of which shall
be in original face amount of $10,000,000.00 and the other(s) of which
shall be in the amount of $1,000,000.00 or such lesser amount as shall
equal the amount of any Disbursements made and outstanding hereunder
against the Revolving Line of Credit Loan. The singular term Note shall
mean a promissory note executed by Borrower for the benefit of Lender
evidencing indebtedness for either the Revolving Line of Credit Loan or
the Revolving Accounts Receivable Loan as the meaning and context shall
indicate or imply.

     “Patient Account Purchase Agreement” shall mean that certain Patient
Account Purchase Agreement between Borrower and Exempla Healthcare, Inc.,
to be executed in February, 2003.

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     “Permitted Liens” shall mean: (a) Liens granted pursuant to any
Loan Document; (b) Liens for taxes not yet due or which are being
contested in good faith and by appropriate proceedings so long as
adequate reserves with respect thereto, if any, are maintained on the
books of the applicable entity in accordance with generally accepted
accounting principles; (c) Liens incurred in the ordinary course of
business in connection with workers’ compensation, unemployment insurance
and other social security legislation, other than any Lien imposed by the
Employee Retirement Income Security Act of 1974, as amended; (d) so long
as an Event of Default has not occurred and is continuing, Liens to
secure the performance of statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business; (e) Liens for equipment used in the
Borrowers ordinary course of business in support of Borrower’s
performance under this Agreement where the security for the Lien is the
equipment itself; (f) Liens on patient accounts not funded by the Loans;
(g) Liens that are expressly made, and acknowledged as, subordinate to
the Lender’s interests; and (h) any other Liens approved in advance in
writing by Lender.

     “Person” shall mean any natural person, unincorporated association,
corporation, partnership, limited liability company, joint venture,
trust, other legal entity, or governmental authority.

     “Pledged Account” shall mean that certain account established by the
Borrower with the Lender pursuant to that Pledged Account Agreement dated
as of February 10, 2003 between the Borrower and the Lender.

     “Transfer” shall mean (a) except as otherwise permitted by this
Agreement, the Loan Documents or the Related Documents, any sale,
transfer, assignment, conveyance, hypothecation, encumbrance, lease or
vesting of the Collateral or any part thereof, or interest therein, to,
or in any Person, whether voluntary, involuntary, by operation of law, or
otherwise; (b) any sale, transfer, assignment, conveyance, hypothecation,
encumbrance or vesting of any ownership interest in Borrower or any
consolidation or merger of Borrower into or with any Person, whether
voluntary, involuntary, by operation of law, or otherwise; or (c) except
as otherwise permitted hereby, the execution of any agreement (other than
any agreement which contains an express condition precedent requiring
Lender’s consent) to do any of the foregoing. Notwithstanding the
foregoing, however, no such sale, transfer, assignment, conveyance,
hypothecation or encumbrance of the Collateral or sale, transfer,
assignment, conveyance, hypothecation, encumbrance or vesting of any
ownership interest in Borrower shall be deemed a Transfer where the sale,
transfer, assignment, conveyance, hypothecation or encumbrance is made to
a wholly owned subsidiary or parent company of Borrower and the sale,
transfer, assignment, conveyance, hypothecation or encumbrance is
approved by Lender. Approval of such a sale, transfer, assignment,
conveyance, hypothecation or encumbrance by Lender shall not be
unreasonably withheld. A Transfer shall not

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include the sale of any ownership interest in the Borrower wherein after
the sale of the ownership interest the owners of the Borrower’s common
stock as of the date of this Agreement continue to own more than fifty
percent (50%) of the Borrower’s common stock.

     1.2 Accounting Terms. For purposes of this Agreement, all accounting
terms not otherwise defined herein or in the Recitals shall have the meanings
assigned to them in conformity with generally acceptable accounting practices
and principles.

ARTICLE II

PAYMENT

     2.1 Agreement to Lend and Borrow. Subject to the terms and conditions of
this Agreement, Lender agrees to lend to Borrower and Borrower agrees to borrow
from Lender up to the Loan Amount. The proceeds of the Advances from the
Revolving Accounts Receivable Loan shall be used solely to fund the purchase by
Borrower, in the ordinary course of its business, of hospital patient accounts
contemplated by and pursuant to the Patient Account Purchase Agreement and the
Service Agreement. The proceeds of the Advances from the Revolving Line of
Credit Loan shall be used solely for business purposes of the Borrower in
support of Borrower’s operations and obligations undertaken pursuant to the
Patient Account Purchase Agreement and the Service Agreement.

     2.2 Evidence of Indebtedness. The Loans, and all Disbursements
thereunder, shall be evidenced by the Notes, with all Disbursements being
charged and funded under the applicable Notes. The Notes shall be secured by
the Commercial Security Agreements. Notwithstanding the fact that a
Disbursement may be charged and funded under an individual Note signed by
Borrower and the Guarantors, Borrower and Guarantors acknowledge and agree that
all and any Collateral for any Advance under any Note evidencing indebtedness
of all or part of the Loans shall cross collateralize all other Notes
evidencing any part of the indebtedness under the Loans. In the event of any
inconsistency between any of the Notes and this Agreement, the provisions of
this Agreement shall prevail.

     2.3 Interest Rate Payment.

     (a) Initial Interest Rates. The interest rate of the Note that
evidences indebtedness for the Revolving Accounts Receivable Loan shall
be 2.0% over the Prime Rate adjusted daily, with a floor rate of 6.0%.
The Prime Rate shall mean the published base rate on corporate loans at
large US money center commercial banks as set forth in The Wall Street
Journal. The interest rate of the Note or Notes that evidence
indebtedness for the Revolving Line of Credit Loan shall be 2.0% over the
rate earned on the Certificates of Deposit, fixed for the same period as
the rate to be earned on the Certificate of Deposit.

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     (b) Payment.

     (i) Monthly payments of interest only on the Notes, at the
interest rate applicable to each Note, which shall be due and
payable on the first day of the month commencing with the first
month following the month of the Closing Date. The Note that
evidences indebtedness for the Revolving Accounts Receivable Loan
(and the resultant monthly payments of interest and principal due
there under) shall be adjusted daily to reflect any changes in the
Prime Rate and in the outstanding principal balance.

     (ii) Monthly payment of principal to the Lender in the amounts
received by Borrower for each Patient Account Credit Agreement up
to the amount advanced by Lender to purchase each such Patient
Account Credit Agreement

     (c) Rate After Default. Upon the occurrence and during the
continuation of any Event of Default, at the option of Lender, the
outstanding principal balance of the Notes shall bear interest, payable
on demand, at the default rate of 36% as set forth in the Notes.

     (d) Computation of Interest. Interest shall be calculated on a
360-day year for all Advances, but, in any case, shall be computed for
the actual number of days in the period for which interest is charged.
If any payment of interest under the Note would otherwise be due on a day
which is not a Business Day, the payment instead shall be due on the next
succeeding Business Day and such extension of time shall be included in
computing the interest due with respect to said payment.

     (e) No Deductions. All payments of principal or interest under the
Notes shall be made (i) without deduction of any present and future
taxes, levies, imposts, deductions, charges or withholdings of any nature
whatsoever, which amounts shall be paid by Borrower, and (ii) without any
other set off. Borrower will pay the amounts necessary such that the
gross amount of the principal and interest received by Lender is not less
than that required by the Notes.

     2.4 Repayment of Amounts.

     (a) The outstanding principal balance of the Notes (including,
without limitation, all Disbursements evidenced thereby), together with
all unpaid accrued interest thereon, and all other amounts payable by
Borrower with respect to the Notes or pursuant to the terms of any other
Loan Documents, shall be due and payable on the Maturity Date.

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     (b) All payments of principal and interest due under the Notes shall
be payable in lawful money of the United States of America, at 1331 17th
Street, Denver, Colorado 80202, in immediately available federal funds,
not later than 1:00 p.m. Mountain Standard Time.

     2.5 Prepayment of Principal; Reductions of the Loan Amount. Borrower
shall have the right to prepay amounts outstanding under the Loans, in whole or
in part at any time, without premium or penalty.

     2.6 Commitment Fee. Borrower shall pay to Lender a commitment fee of 1%
of the amount of the Revolving Accounts Receivable Loan (the “Commitment Fee”),
which shall be due and paid at the time of the first Advance from the Revolving
Accounts Receivable Loan. Borrower hereby authorizes Lender to make a
Disbursement to Lender from the Revolving Line of Credit Loan to pay any
Commitment Fee owing notwithstanding that Borrower may not have requested an
Advance of the Loan Amount from the Revolving Line of Credit Loan for payment
of the Commitment Fee. The authorization hereby granted shall be irrevocable,
and no further direction or authorization from Borrower shall be necessary for
Lender to make such Disbursement. Any Disbursements made pursuant to this
Section shall be added to the outstanding principal balance of the Note that
evidences indebtedness for the Revolving Line of Credit Loan.

ARTICLE III

LOAN CLOSING

     3.1 Conditions Precedent. Lender’s obligation to make Advances and to
perform the remainder of its obligations under this Agreement is expressly
conditioned upon (i) Borrower’s satisfaction of all of the conditions set forth
in Exhibit A; (ii) Borrower’s satisfaction of the conditions for Disbursement
set forth in Article IV (as applicable); (iii) Borrower’s delivery to Lender of
the following Loan Documents, in form and content satisfactory to Lender, duly
executed (where necessary) and acknowledged (where necessary) by the
appropriate parties thereto:

     (a) this Agreement;

     (b) the Notes;

     (c) the Commercial Security Agreements;

     (d) Financing Statements to be filed with the
Secretary of State of the State of Colorado;

     (e) the Continuing Guaranties of John C. Herbers, Guarantor, in the
principal amount of $10,000,000.00 and the amount of any Advance
requested from the Revolving Line of Credit Loan, together not to exceed
$11,000,000.00;

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     (f) the Continuing Guaranties of Steven C. Robbins, Guarantor, in
the principal amount of $10,000,000.00 and the amount of any Advance
requested from the Revolving Line of Credit Loan, together not to exceed
$11,000,000.00;

     (g) resolutions from Borrower authorizing the transactions
contemplated hereby and by the other Loan Documents;

and (iv) Borrower’s delivery to Lender of properly executed copies of the
following related documents (the “Related Documents):

     (h) the Patient Account Purchase Agreement or any future
substantially similar agreement entered with any other hospitals
subsequently approved by Lender for which Patient Account Credit
Agreement purchases are funded by the Revolving Accounts Receivable Loan
in a form substantially similar to that attached hereto as Exhibit B; and

     (i) The Pledged Account Agreement.

     3.2 Advances after Closing. Lender shall have no obligation to make any
Advance following the first Advance made to fund the Initial Account Purchase
unless and until Borrower has paid the Commitment Fee.

     3.3 No Implied Obligation to Approve Advances. Borrower expressly
understands that by Lender closing hereunder, Lender is under no obligation to
make any Disbursement pursuant to a request for an Advance until Borrower has
satisfied all requirements set forth in Sections 3.1 and 4.1 hereof and all
conditions to Disbursements contained in the other Loan Documents.

ARTICLE IV

DISBURSEMENTS OF THE LOAN

     4.1 Conditions to Advances. Borrower shall not be entitled to any Advance
unless:

     (a) the representations and warranties as specified herein shall be true
and correct at the date of the Advance; and

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     (b) no Event of Default exists and no event exists which, with the giving
of notice or the passage of time, or both, would constitute an Event of
Default; and

     (c) Borrower has established its principal operating account and pledged
account with Lender.

     (d) with respect to The Revolving Line of Credit Loan, no Advance shall be
made until the Note for the Revolving Line of Credit is amended to state an
amount certain for the principal equal to the Certificate of Deposit purchased
to secure the Note.

     (e) Borrower shall have received Lender’s prior written approval to any
modification or amendment to the Related Documents where, in Lender’s opinion,
the modification or amendment: (A) adversely effects Lender’s rights (1) under
the Pledged Account Agreement; (2) to receive payment; (B) modifies in any way
Sections 4,5,6,7, or 15 of the Patient Account Purchase Agreement; or (C) has a
material adverse effect upon Borrower’s or Lender’s right or obligations under
the Loan Documents or the Related Documents.

     4.2 Advance Amounts and Requirements. Borrower shall be entitled to
receive an Advance under the Loans as follows:

     (a) Borrower may request Advances up to the amount of the Loan
Amount so long as the amount requested, together with all other amounts
previously requested and outstanding, does not exceed the Loan Amount,
and provided that no Advance will cause the outstanding balance due on
either the Revolving Accounts Receivable Loan or the Revolving Line of
Credit Loan to exceed the authorized Loan Amount of either the Revolving
Accounts Receivable Loan or the Revolving Line of Credit Loan, as
appropriate.

     (b) For the Advance to fund the Initial Account Purchase from the
Revolving Accounts Receivable Loan, Borrower shall have provided Lender
with a complete loan package including, without limitation, copies of the
following documents: (i) a Note, (ii) a Commercial Security Agreement,
and (iii) Continuing Guaranties, each in the amount of the Ten Million
Dollars ($10,000,000.00). At the time of the Advance Request, the loan
package shall be supplemented to include a list of the Patient Account
Credit Agreements included in the Initial Account Purchase. The list
shall contain a description of: the name and address of each patient who
has executed a Patient Account Credit Agreement; the type of Patient
Account Credit Agreement; the amount of the principal under the Patient
Account Credit Agreement; and the total amount of the Borrower’s
purchase. For the Initial Account Purchase and for subsequent Advances,
the original Patient Account Credit Agreements shall be held by the
Lender but on request by Borrower (which request Borrower shall make and
which shall be a written blanket request), after execution of the
Commercial Security Agreement and filing of the Financing Statement,
shall be delivered to Borrower, as bailee, for servicing. Lender shall
have no obligation to service the Patient Account

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Credit Agreements. For each subsequent Advance from the Revolving
Accounts Receivable Loan, including but not limited to any subsequent
Advance for a further funding of the Initial Account Purchase, Borrower
shall similarly provide such list of the Patient Account Credit
Agreements to be purchased by Borrower pursuant to the Patient Account
Purchase Agreement. For each Advance from the Revolving Line of Credit
Loan, Borrower shall have purchased from Lender a fully negotiable
Certificate of Deposit in the amount of a Note executed by Borrower for
such Advance to be held by Lender as Collateral. Borrower shall have
executed a Commercial Security Agreement in the amount of any Certificate
of Deposit in a form acceptable to and provided by Lender. Borrower
shall deliver executed Continuing Guaranties of Steven C. Robbins and
John C. Herbers, Guarantors. Borrower further agrees to execute any
further documents Lender shall require regarding such Certificate of
Deposit to effectuate Lender’s full and irrevocable control and
possession over Borrower’s Certificate of Deposit for so long as the same
shall constitute any part of the Collateral.

     If, as part of the Initial Account Purchase or as part of a
subsequent Advance, Borrower elects to take assignment of Patient Account
Credit Agreements in lieu of possession, Borrower shall take assignment
only pursuant to an assignment document substantially in the form
attached hereto as Exhibit C, and Lender shall be provided collateral
assignment of the Patient Account Credit Agreements by Borrower with a
right to require any or all Patient Account Credit Agreements to be
tendered to Lender .

     (c) The servicing of each individual Patient Account Credit
Agreement under the Revolving Accounts Receivable Loan for which Borrower
requests an Advance shall be performed by Borrower.

     (d) Advances from the Revolving Accounts Receivable Loan may not be
used for any purpose other than for the purpose of providing funds to
support the purchase of Patient Account Credit Agreements pursuant to the
Patient Account Purchase Agreement by Borrower in the ordinary course of
business. Advances from the Revolving Line of Credit Loan may not be
used for any purpose other than for the purpose of providing funds to
support the business services and operations of Borrower during its
ordinary course of business in servicing Patient Account Credit
Agreements. Advances from the Revolving Line of Credit Loan shall not be
used to purchase Patient Account Credit Agreements.

     (e) If (i) any regularly scheduled payment of principal or interest
under any individual Patient Account Credit Agreement purchased with a
Revolving Accounts Receivable Loan Advance becomes three (3) months or
more past due or (ii) any obligor under any individual Patient Account
Credit Agreement financed with an Advance prepays such Patient Account
Credit Agreement in full, then Borrower shall repay in full the
outstanding portion of such Advance applicable to such Patient Account
Credit Agreement (together with all interest accrued and unpaid thereon
through to the date of repayment), whereupon such

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Patient Account Credit Agreement (and all amounts due thereon or
with respect thereto) and all other agreements, documents and instruments
evidencing same, shall no longer constitute Collateral and Lender shall
promptly take such actions as shall be reasonably requested to evidence
that Lender does not possess a security interest in, to or upon any such
assets and/or Borrower’s interests therein. Borrower shall repay in full
the outstanding portion of such Advance applicable to such Patient
Account Credit Agreement following receipt by Borrower of any repayment
by any hospital to which a repurchase request has been made, and in any
case within thirty (30) days.

     (f) If Borrower shall demand the repurchase of any Patient Account
Credit Agreements by Exempla, or any other approved hospital for which
Revolving Accounts Receivable Loan Advances have been made, then, upon
receipt of payment, Borrower shall repay to the Lender in full the
outstanding portion of such Advance applicable to such Patient Account
Credit Agreements (together with all interest accrued and unpaid thereon
through to the date of repayment), whereupon such Patient Account Credit
Agreements (and all amounts due thereon or with respect thereto) and all
other agreements, documents and instruments evidencing same, shall no
longer constitute Collateral and Lender shall promptly take such actions
as shall be reasonably requested to evidence that Lender does not possess
a security interest in, to or upon any such assets and/or Borrower’s
interests therein.

     (g) Borrower acknowledges and agrees that Lender shall irrevocably
have the rights of Lender as a third party beneficiary of the Patient
Account Purchase Agreement, including without limitation the rights
granted in paragraphs 5 and 7 thereof, and that Lender may in its sole
discretion exercise such rights to require Exempla, or any other
subsequently approved hospital, to repurchase all or any portion of the
Patient Account Credit Agreements to the extent they constitute any part
of the Collateral. Upon receipt of payment in full for any such Patient
Account Credit Agreements (together with all interest accrued and unpaid
thereon through to the date of repayment), such Patient Account Credit
Agreements, and all agreements, documents and instruments evidencing
same, shall no longer constitute Collateral and Lender shall promptly
take such actions as shall be reasonably requested to evidence that
Lender does not possess a security interest in, to or upon any such
assets and/or Borrower’s interests therein.

     (h) Borrower shall regularly submit, or cause to be submitted, to
Lender the following documents: (i) quarterly financial statements of
Borrower, (ii) monthly accounts receivable aging reports of Borrower for
Patient Account Credit Agreements purchased with Advances from the
Revolving Accounts Receivable Loan, (iii) annual reviewed statements of
Borrower, (iv) federal and state tax returns of Borrower, (v) annual
personal financial statements of each Guarantor, (vi) federal tax returns
of each Guarantor, and (vii) any documents required to be supplied by
paragraph 6.12 of this Agreement.

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     4.3 Payment of Interest. Borrower hereby authorizes Lender, at Lender’s
sole discretion, to make Disbursements to pay accrued and unpaid interest on
the Notes that is due and owing as set forth in Lender’s prior monthly
statement to Borrower provided such interest is not paid within fifteen (15)
days of the date due, notwithstanding that Borrower may not have requested an
Advance of such amount. Lender may, at Lender’s sole discretion, make such
Disbursements notwithstanding the fact that an Event of Default has occurred
and is continuing. Such Disbursements shall be added to the outstanding
principal balance of the Notes. The authorization hereby granted shall be
irrevocable, and no further direction or authorization from Borrower shall be
necessary for Lender to make such Disbursements; provided that the provisions
of this Section 4.3 shall not prevent Borrower from paying interest from its
own funds.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

     5.1 Consideration. As an inducement to Lender to execute this Agreement
and to make Disbursements, Borrower represents and warrants to Lender that the
following statements set forth in this Article V are true, correct and complete
as of the date hereof and will be true, correct and complete as of the Closing
Date and funding of any Disbursement (except to the extent that such
representations and warranties expressly relate solely to an earlier date).

     5.2 Organization, Powers and Good Standing.

     (a) Organization and Powers. Borrower is a Colorado corporation,
duly organized and validly existing under the laws of the State of
Colorado and authorized to do business in the State of Colorado.
Borrower has all requisite power, authority and right to own and operate
its properties, to carry on its businesses as now conducted and as
proposed to be conducted, and to enter into and perform this Agreement,
the other Loan Documents and the Related Documents. The chief executive
office of Borrower is 7807 E. Peakview Ave., Suite 300, Greenwood
Village, Colorado 80111.

     (b) Good Standing. Borrower has qualified to do business, and is in
good standing, in the State of Colorado and in each other jurisdiction in
which the character of the property it owns or the nature of the business
it transacts makes such qualification necessary, except where the failure
to be so qualified could not reasonably be expected to have a materially
adverse effect on the business, operations, assets or condition
(financial or otherwise) of Borrower.

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     (c) Non-foreign Status. Borrower is not a “foreign corporation,”
“foreign partnership,” “foreign trust,” or “foreign estate,” as those
terms are defined in the Internal Revenue Code and the regulations
promulgated thereunder. Borrower’s U.S. employer identification number
is                    .

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     5.3 Authorization of Loan Documents

     (a) Authorization. The execution, delivery and performance of the
Loan Documents and the Related Documents by Borrower are within
Borrower’s powers and have been duly authorized by all necessary action
of Borrower.

     (b) No Conflict. The execution, delivery and performance of the
Loan Documents and the Related Documents by Borrower will not violate (i)
Borrower’s Articles of Incorporation, its By-Laws, or any amendments to
either of them; or (ii) any legal requirement affecting Borrower or any
of its respective properties; or (iii) any agreement to which Borrower is
bound or to which it is a party, and will not result in or (except as
provided in or contemplated by this Agreement) require the creation of
any lien upon any of such properties.

     (c) Governmental and Private Approvals. All applicable preliminary
governmental or regulatory orders, consents, permits, authorizations and
approvals have been obtained or will be obtained on an ongoing as needed
basis from time to time and are in full force and effect. No additional
governmental or regulatory actions, filings or registrations with respect
to the Borrower’s business, and no approvals, authorizations or consents
of any trustee or holder of any indebtedness or obligation of Borrower
are required for the due execution, delivery and performance by Borrower
of the Loan Documents.

     (d) Binding Obligations. This Agreement, the Loan Documents and the
Related Documents have been duly executed by John C. Herbers and Steven
C. Robbins as officers of Borrower, and are legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general principles of equity.

     5.4 No Material Defaults. There exists no material violation of or
material default by Borrower and, to the best knowledge of Borrower, no event
has occurred which, upon the giving of notice or the passage of time, or both,
could reasonably be expected to constitute a material default, under (a) the
terms of any instrument evidencing or securing any indebtedness secured by the
Collateral, (b) any lease or other agreement affecting the Collateral to which
Borrower is a party, (c) any license, permit, statute, ordinance, law,
judgment, order, writ, injunction, decree, rule or regulation of any
governmental authority, or any determination or award of any arbitrator to
which Borrower or the Collateral may be bound, or (d) any mortgage, instrument,
agreement or document by which Borrower or any of their respective properties
is bound: (i) which involves any Loan Document or any Related Documents, (ii)
which involves the Collateral and is not adequately covered by insurance, (iii)
which might materially and adversely affect the ability of Borrower to perform
their obligations under any of the Loan Documents or any other material
instrument, agreement or document to which it or he is a party, or (iv) which
might adversely affect the first priority of the

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security interest (subject only to Permitted Liens) created in favor of Lender
by this Agreement or any of the other Loan Documents or Related Documents.

     5.5 Litigation; Adverse Facts. Except as has been previously disclosed to
Lender, there is no action, suit, investigation, proceeding or arbitration
(whether or not purportedly on behalf of Borrower) at law or in equity or
before or by any foreign or domestic court or other governmental entity (a
“Legal Action”), pending, or to the knowledge of Borrower, threatened against
or affecting Borrower or any Guarantor or any of their respective assets which
could reasonably be expected to have a materially adverse effect on the
business, operations, assets (including the Collateral) or condition (financial
or otherwise) of Borrower or any Guarantor or on the Borrower’s or any
Guarantor’s ability to perform their respective obligations under the Loan
Documents. Borrower and, to the knowledge of Borrower, Guarantors are not
subject to, or in default with respect to any other legal requirement that
could reasonably be expected to have a materially adverse effect on the
business, operations, assets (including the Collateral) or condition (financial
or otherwise) of Borrower or any Guarantor. There is no Legal Action pending
or, to the knowledge of Borrower, threatened against or affecting Borrower or
any Guarantor questioning the validity or the enforceability of this Agreement
or any of the other Loan Documents or any of the Related Documents.

     5.6 Title to Property; Liens. Except to the extent that the failure to
have good, sufficient and legal title would not have a material and adverse
effect on the value of the Collateral or Borrower’s ability to perform its
obligations under the Loan Documents or Related Documents to which it is a
party, Borrower has good, sufficient and legal title to all properties and
assets reflected in its most recent pro forma balance sheet delivered to Lender
and will in the future have: (a) good, sufficient and sole legal title to all
Collateral; and (b) good, sufficient and legal title to all other properties
and assets reflected in its financial statements as being owned by it. The
Collateral is and shall remain free and clear of all Liens other than Permitted
Liens. Borrower represents and warrants that Lender shall at all times have a
first priority security interest (subject only to Permitted Liens) in, to and
upon the Collateral. Borrower represents and warrants that with the sole
exception of the Initial Account Purchases funded by an Advance or Advances
from the Revolving Accounts Receivable Loan, all patient accounts for which any
subsequent Advance is requested from the Revolving Accounts Receivable Loan
shall be Qualified Accounts as that term is defined in the Patient Account
Purchase Agreement unless after receipt of a written request by Borrower,
Lender in its sole discretion shall have approved in writing other means for
assuring the acceptability to Lender of such patient accounts.

     5.7 Disclosure. As of the date hereof, there is no fact known to Borrower
that materially and adversely affects the business, operations, assets or
condition (financial or otherwise) of Borrower or Guarantors which has not been
disclosed in this Agreement or in other documents, certificates and written
statements furnished to Lender in connection herewith.

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     5.8 Payment of Taxes. All tax returns and reports of Borrower required to
be filed by it have been timely filed, and all taxes, assessments, fees and
other governmental charges upon Borrower and upon its properties, assets,
income and franchises which are due and payable have been paid when due and
payable, except those that are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted.

     5.9 Rights to Property Agreements, Permits and Licenses. Borrower is the
true owner of all rights in and to all existing Patient Account Credit
Agreements and other documents relating to the Collateral, and will be the true
owner of all rights in and to all future Patient Account Credit Agreements and
other documents relating to the Collateral, except in each case to the extent
that the failure to be the true owner thereof would not have a material and
adverse effect on the value of the Collateral or Borrower’s ability to perform
its obligations under the Loan Documents or Related Documents to which it is a
party. Borrower’s interest in all such future Patient Account Credit
Agreements and other documents is not subject to any present claim, set-off or
deduction (in each case, other than under the Loan Documents or as otherwise
approved by Lender in its discretion) other than any of the foregoing arising
in the ordinary course of business.

     5.10 Compliance with Laws. Borrower is in compliance with all applicable
federal, state and local laws in each state in which it is carrying on its
business, except to the extent any such non-compliance could not reasonably be
expected to have a materially adverse effect on the business, operations,
assets (including the Collateral) or condition (financial or otherwise) of
Borrower.

     5.11 Financial Condition. The financial statements and all financial data
of Borrower previously delivered to Lender in connection with the Loans and/or
relating to Borrower are true, correct and complete in all material respects as
of the date of such statements; provided however that the pro-formas of
Borrower contain forward looking statements subject to risks and uncertainties
that could cause actual results and events to differ materially from those
anticipated. Such financial statements fairly present the financial position
of the Borrower who is the subject thereof as of the date thereof. No material
adverse change has occurred in such financial position of Borrower and, except
for the Loans, no borrowings have been made by Borrower since the date thereof
which are secured by the Collateral or the proceeds of the Loans.

     5.13 Other Loan Documents. Each of the representations and warranties of
Borrower contained in any of the other Loan Documents and any Related
Documents, whether such Related Documents are executed before or after this
Agreement, is true and correct in all material respects. All of such
representations and warranties are incorporated herein for the benefit of
Lender.

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     5.14 Authorization to Receive Notification from Colorado Department of
Revenue. Borrower authorizes Lender to receive notification from the Colorado
Department of Revenue in the event Borrower is delinquent in the payment of any
sales and use taxes, special fuel taxes, withholding taxes, gas taxes or
aviation fuel taxes.

ARTICLE VI

COVENANTS OF BORROWER

     6.1 Consideration. As an inducement to Lender to execute this Agreement
and to make each Disbursement, Borrower hereby covenants as set forth in this
Article VI, which covenants shall remain in effect so long as the Note shall
remain unpaid.

     6.2 No Encumbrances. Borrower will not (a) permit any Lien, levy,
attachment or restraint to be made or filed against the Collateral, or any
portion thereof other than Permitted Liens or (b) permit any receiver, trustee
or assignee for the benefit of creditors to be appointed to take possession of
the Collateral or any portion thereof.

     6.3 Compliance with the Laws. Borrower will comply in all material
respects with all laws and requirements of all federal and state governmental
authorities having jurisdiction over the Borrower’s business and will furnish
Lender with reports of any official searches for violation of any requirements
established by such governmental authorities.

     6.4 Lender Inspections. Throughout the term of this Agreement and the
Loans and for twelve (12) months following termination of either, and during
normal business hours and upon reasonable notice, Borrower will permit Lender
and Lender’s representative, inspectors and consultants to enter upon and
inspect Borrower’s business, to audit, examine and copy all contracts, records
(including, but not limited to, financial and accounting records pertaining to
the Loans (and the Loan Documents and Related Documents) or the Borrower’s
business) which are kept at Borrower’s offices, and to discuss the affairs,
finances and accounts of Borrower with representatives of Borrower.

     6.5 Compliance with Loan Documents. Borrower will comply with all
conditions of this Agreement, whether or not an Advance is requested. Borrower
will comply and, to the extent it is able, will cause compliance by parties
thereto, with all other Loan Documents and Related Documents.

     6.6 Trade Names. Borrower shall promptly notify Lender in writing of any
change in the legal, trade or fictitious business names used by Borrower and
shall, upon Lender’s request, execute any additional filings necessary to
reflect the change in trade names or fictitious business names.

	6.7	 	Further Assurances. Borrower shall execute and deliver from
time to time, promptly after any request therefore by Lender, any
and all instruments,

18

 

	 	 	agreements and documents and shall take such other action as may be
necessary or desirable in the opinion of Lender to maintain,
perfect or insure Lender’s security interest provided for herein
and in the other Loan Documents and the Related Documents,
including, without limitation, the execution of such amendments to
the Commercial Security Agreement and the other Loan Documents as
Lender shall reasonably require, and Borrower shall pay all fees
and expenses (including reasonable attorneys’ fees) related
thereto. In connection therewith, Borrower authorizes Lender to
file all Financing Statements (and all applicable amendment and/or
continuation statements) required hereby or pursuant to the terms
of any other Loan Document. Borrower shall execute the Patient
Account Purchase Agreement substantially in the form attached
hereto as Exhibit B. Borrower shall provide Lender with copies of
proposed modifications or amendments to the Patient Account
Purchase Agreement.

     6.8 Notice of Litigation. Borrower will give, or cause to be given,
prompt written notice to Lender of (a) any action or proceeding which is
instituted by or against Borrower (or against any Guarantor if Borrower has
such knowledge) in any federal or state court or before any commission or other
regulatory body, federal, state or local, foreign or domestic, or any such
proceedings which are threatened against Borrower or any Guarantor (if Borrower
has such knowledge) which, if adversely determined, could reasonably be
expected to have a materially adverse effect upon Borrower’s business,
operations, properties, assets, management, ownership or condition (financial
or otherwise), (b) any other action, event or condition of any nature which may
have a material and adverse effect upon Borrower’s business, operations,
management, assets, properties, ownership or condition (financial or
otherwise), or which, with notice or lapse of time or both, would constitute an
Event of Default, and (c) any actions, proceedings or notices adversely
affecting the Collateral or Lender’s interest therein by any governmental
officers, offices or departments having jurisdiction with respect to the
Collateral.

     6.9 Amendments to Articles of Incorporation and By-Laws. Borrower shall
not allow any material amendments to be made to its Articles of Incorporation
or Bylaws without Lender’s prior written consent, which consent shall not be
unreasonably withheld or delayed.

     6.10 Insurance Requirements. At all times throughout the term hereof and
of the Loans, Borrower shall, at its sole cost and expense, maintain, with
financially sound and reputable independent insurers, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons, including without limitation coverage for
comprehensive general liability, automobiles owned and hired, and property
loss. Borrower shall obtain endorsements to include contractual coverage.
Notwithstanding the foregoing, Lender shall be included as an additional named
insured and loss payee under such policies. All policies evidencing the

19

 

insurance required shall not be cancelable as to the interests of Lender
due to the acts of Borrower and shall provide for at least thirty (30) days
prior written notice of the cancellation or modification thereof to Lender. On
or before the Closing Date, Borrower shall promptly provide Lender with copies
of all such policies of insurance and certificates of insurance evidencing that
such insurance is in full force and effect (together with proof of the payment
of the premiums thereof). Lender acknowledges that a blanket policy of
insurance is acceptable. At least thirty (30) days prior to the expiration of
each such policy, Borrower shall furnish Lender with evidence that such policy
renewal has been requested, with a term covering at least the next succeeding
calendar year, insurance thereof of the types and in the amounts required. At
least ten (10) days prior to the expiration of each such policy, a certificate
must be issued verifying that there is in full force and effect all required
insurance.

     6.11 Maintenance of Existing Licenses. Borrower shall maintain and
preserve its existence and all rights and licenses material to its business,
except for any the failure of which to maintain could not reasonably be
expected to have a materially adverse effect on the business, operations,
assets (including the Collateral) or condition (financial or otherwise) of
Borrower.

     6.12 Financial Statements and Reports. Throughout the term of the Loans
until all of its obligations under this Agreement are paid in full, Borrower
shall promptly provide Lender with quarterly financial statements, monthly
accounts receivable aging reports for Patient Account Credit Agreements
purchased with Advances from the Patient Accounts Receivable Loan, annual
reviewed statements, copies of its federal and state tax returns and, to the
extent requested by Lender, copies of all reports and accountings required to
be supplied to Exempla by the terms of the Related Documents, or all reports
and accountings required to be supplied by the terms of the Related Documents
to any other hospital approved by Lender and for which Lender is providing
funding for patient account purchases. Borrower shall obtain from Guarantors
and promptly provide Lender with the annual financial statements and federal
tax returns of each of the Guarantors. Borrower shall also provide Lender with
all other financial records, documents and information reasonably requested by
Lender from time to time.

     6.13 Maintenance of Operating Account with Lender. Borrower shall use its
best efforts to maintain continuously throughout the term of this Agreement its
principal operating depository accounts with Lender, including without
limitation the Pledged Account as such term is defined in the Pledged Account
Agreement, to the extent such accounts relate to or receive payments pursuant
to the Patient Account Purchase Agreement or other agreements with Lender
approved hospitals from which Borrower purchases accounts funded by Lender.
Borrower shall do so unless in the ordinary course of business and in the sole
business judgment of Borrower, it is required to do otherwise. Borrower shall
advise Lender of any accounts it is required to maintain elsewhere.

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ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

     7.1 Events of Default.

     (a) The occurrence of any one or more of the following shall
constitute an Event of Default under this Agreement:

     (i) Failure by Borrower to pay any monetary amount when due
under any Loan Document or any Related Document and Borrower’s
failure to cure within ten (10) days after written notice of such
failure by Lender to Borrower.

     (ii) Failure by Borrower to perform any obligation not
involving the payment of money, or to comply with any other term or
condition applicable to Borrower under any Loan Document or any
Related Document and Borrower has not initiated and maintained
reasonable efforts to cure such failure within thirty (30) days of
receipt of written notice of such failure, it being presumed that
ninety (90) days is an adequate and reasonable period to cure such
failure.

     (iii) Any representation or warranty by Borrower in any Loan
Document is materially false, incorrect, or misleading as of the
date made.

     (iv) The occurrence of any event (including, without
limitation, a change in the financial condition, business, or
operations of Borrower or Guarantors for any reason whatsoever)
that materially and adversely affects the ability of Borrower or
any Guarantor to perform any of their obligations under the Loan
Documents.

     (v) Borrower or any Guarantor (i) is unable or admits in
writing to Borrower’s or the Guarantor’s inability to pay
Borrower’s or the Guarantor’s monetary obligations as they become
due, (ii) makes a general assignment for the benefit of creditors,
or (iii) applies for, consents to, or acquiesces in, the
appointment of a trustee, receiver, or other custodian for Borrower
or such Guarantor or the property of Borrower or such Guarantor or
any part thereof, or in the absence of such application, consent,
or acquiescence a trustee, receiver, or other custodian is
appointed for Borrower or any Guarantor or the property of Borrower
or any Guarantor or any part thereof, and such appointment is not
discharged within sixty (60) days.

     (vi) Commencement of any case under the Bankruptcy Code, Title
11 of the United States Code, or commencement of any other
bankruptcy arrangement, reorganization, receivership,
custodianship, or similar proceeding under any federal, state, or
foreign law by or against

21

 

Borrower or any Guarantor and with respect to any such case or
proceeding that is involuntary, such case or proceeding is not
dismissed within sixty (60) days of the filing thereof.

     (vii) Commencement of any action or proceeding which seeks as
one of its remedies the dissolution of Borrower or any Guarantor,
and with respect to any such action or proceeding that is
involuntary, such action or proceeding is not dismissed within
sixty (60) days of the commencement thereof.

     (viii) All or any material part of the property of Borrower is
attached, levied upon, or otherwise seized by legal process, and
such attachment, levy, or seizure is not quashed, stayed, or
released within thirty (30) days of the date thereof.

     (ix) The occurrence of any Transfer, unless prior to such
Transfer Lender has delivered to Borrower the written consent of
Lender to such Transfer.

     (x) The occurrence of any Event of Default, as such term is
defined in any other Loan Document or Related Document, and the
expiration of all applicable notice and cure periods, if any.

     (xi) Inability of Borrower to satisfy any condition for the
receipt of a Disbursement hereunder, or to resolve the situation to
the satisfaction of Lender, within a period of thirty (30) days
after written notice from Lender.

     (xii) Borrower ceases operation of its business or the action
of any governmental agency which has authority over the operations
of Borrower causes any or all of the operations of Borrower to be
shut down.

     (xiii) The failure of any entity with which Borrower has
contracted under any agreement to repurchase accounts on demand
made by Lender pursuant to the terms of such agreements, including
without limitation failure of Exempla Healthcare, Inc., to
repurchase any account on demand by Lender pursuant to the terms of
the Patient Account Purchase Agreement.

     (xiv) The failure of the Lender to make an Advance as required
under the terms of this Agreement.

     7.2 Remedies.

     (a) Notwithstanding any provision to the contrary herein or any of
the other Loan Documents or Related Documents, upon the occurrence and
during the continuation of any Event of Default: (i) Lender’s obligation
to make further

22

 

Advances shall abate, (ii) if the Event of Default shall not be cured
within the applicable notice and cure periods, then Lender shall, at its
option, have the remedies provided in the Loan Document or the Related
Documents breached by Borrower, including, without limitation, the option
to declare all outstanding indebtedness to be immediately due and payable
without presentment, demand, protest or notice of any kind, (iv) Lender
may, at its option, apply any of Borrower’s funds in its possession to
the outstanding indebtedness under the Notes whether or not such
indebtedness is then due, (v) Lender may exercise all rights and remedies
available to it under any or all of the Loan Documents or under any or
all of the Related Documents, and (vi) Lender and Borrower shall have any
and all remedies available at law or equity. All sums expended by Lender
for such purposes shall be deemed to have been disbursed to and borrowed
by Borrower and shall be secured by the Commercial Security Agreement and
other applicable Loan Documents or the Pledged Account.

     (b) Borrower hereby constitutes and appoints Lender, or such
independent contractor as may be selected by Lender, as its true and
lawful attorney-in-fact with full power of substitution for the purposes
of managing Borrower’s business and the performance of Borrower’s
obligations under this Agreement in the name of Borrower, and hereby
empowers said attorney-in-fact to do any or all of the following upon the
occurrence and during the continuation of an Event of Default:

          (i) to use any of the funds of Borrower, including any
balance of the Loans previously disbursed, as applicable, and any
funds including the Certificate of Deposit which may be held by
Lender for Borrower, for the purpose of maintaining Borrower’s
business;

          (ii) to employ attorneys to defend against attempts to
interfere with the exercise of power granted hereby;

          (iii) to pay, settle or compromise all existing bills and
claims which are or may be Liens (other than Permitted Liens)
against any Collateral or may be necessary or desirable for the
clearance of objections to or Liens (other than Permitted Liens)
on any such Collateral;

          (iv) to prosecute and defend all actions or proceedings in
connection with the Borrower’s business and to take such actions,
require such performance and do any and every other act as is
deemed reasonably necessary which Borrower might do on its own
behalf;

          (v) to take such action and require such performance as
it deems reasonably necessary under any of the bonds or insurance
policies to be furnished hereunder, to make settlements and
compromises with the sureties or insurers thereunder, and in
connection therewith to execute instruments of release and
satisfaction; and

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          (vi) to take over the management of Borrower’s business,
maintain Borrower’s business, collect receivables and take all
other actions which are necessary or incidental in the operation
and management of Borrower’s business for the benefit of any
creditors of Borrower.

     It is understood and agreed that the foregoing power of attorney shall be
deemed to be a power coupled with an interest, which cannot be revoked until
full repayment of the Loans.

ARTICLE VIII

MISCELLANEOUS

     8.1 Assignment. Borrower shall not assign any of its rights under this
Agreement without Lender’s prior written approval.

     8.2 Notices. All notices, requests, demands and consents to be made
hereunder to the parties hereto shall be in writing and shall be delivered by
hand or sent by registered mail or certified mail, postage prepaid, return
receipt requested, through the United States Postal Service to the addresses
shown below or such other address which the parties may provide to one another
in accordance herewith. Such notices, requests, demands and consents, if sent
by mail shall be deemed given two (2) Business Days after deposit in the United
States mail, and if delivered by hand, shall be deemed given when delivered.

	 	 	 
	To Lender:

	 	David Livingston, President

Guaranty Bank and Trust Company – Cherry Hills

6501 East Belleview Avenue, Suite 100

Englewood, Colorado 80111
	 
	 	 
	To Borrower:

	 	President

Integrated Financial Systems, Inc.

7807 E. Peakview Ave., Suite 300

Greenwood Village, Colorado 80111
	 
	 	 
	With a mandatory copy to Steven C. Robbins and John C. Herbers at
the address of Borrower as set forth above.

Lender shall have no obligation to provide any notices, requests, demands and
consents to be made hereunder to the Guarantors unless such notice, request,
demand or consent to the Guarantors is expressly called for in this Agreement.

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     8.3 Authority to File Notices. Borrower irrevocably appoints Lender as
its attorney-in-fact, with full power of substitution, to file for record, at
Borrower’s cost and expense and in Borrower’s name, any notices that Lender
considers necessary or desirable to protect its security interest granted
pursuant to the Loan Documents.

     8.4 Inconsistencies with the Loan Documents; Loan Commitment. In the
event of any inconsistencies between the terms of this Agreement and any terms
of any of the Loan Documents or the application thereof, the terms of this
Agreement shall govern and prevail. The terms and conditions of the Commitment
Letter are incorporated herein in their entirety. In the event of a conflict
between the Commitment Letter and this Agreement, this Agreement shall prevail.
In the event of any conflict between this Agreement and the Related Documents,
this Agreement shall prevail.

     8.5 No Waiver. No Disbursement shall constitute a waiver of any
conditions to Lender’s obligation to make further Advances nor, in the event
Borrower is unable to satisfy any such conditions, shall any such waiver have
the effect of precluding Lender from thereafter declaring such inability to
constitute a default or Event of Default under this Agreement.

     8.6 Lender Approval of Instruments and Parties. All proceedings taken in
accordance with transactions provided for herein, all Patient Account Credit
Agreements and other documents required or contemplated by this Agreement and
the Persons responsible for the execution and preparation thereof shall be
satisfactory to and subject to approval by Lender. Lender’s counsel shall be
provided with copies of all documents which they may reasonably request in
connection with this Agreement.

     8.7 Lender Determination of Facts. Lender shall at all times be free to
establish independently, to its satisfaction, the existence or nonexistence of
any fact or facts, the existence or nonexistence of which is a condition of
this Agreement.

     8.8 Incorporation of Preamble, Recitals and Exhibits. The preamble,
recitals and exhibits hereto are hereby incorporated into this Agreement.

     8.9 Third-Party Consultants. Upon the occurrence and during the
continuation of an Event of Default, Lender may hire such third party
consultants as it deems necessary, the costs of which shall be paid by
Borrower, to perform such services as may, from time to time, reasonably be
required by Lender pertaining to the Collateral and Borrower’s compliance with
the Loan Documents. Borrower hereby authorizes Lender, in its discretion, to
pay such expenses, charges, costs and fees at any time by a Disbursement. This
obligation on the part of Borrower shall survive the closing of the Loans and
the repayment thereof. In addition, without regard to the occurrence of an
Event of Default, Borrower shall within sixty days of the making of a first Advance from the
Revolving Accounts Receivable Loan, hire a third party consultant, who shall be
acceptable to Lender, to prepare a financial audit of the patient accounts and
all Patient Account Credit Agreements included as part or all of the Collateral
for the first Advance from the Revolving Accounts Receivable Loan. The audit
scope shall be approved by

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Lender and shall at a minimum confirm the patient
accounts, the Patient Account Credit Agreements and other documents
constituting all or part of the Collateral after the Borrower’s initial
purchase of backlogged and ongoing patient accounts from Exempla, or any other
hospital that may in the future be approved by Lender. The report of such
confirmation audit shall be provided to Lender immediately on its completion.

     8.10 Payment of Expenses. Borrower shall pay all taxes and assessments
and those reasonable expenses, charges, costs and fees provided for in this
Agreement or relating to the Loans, including, without limitation, any fees
incurred for recording or filing any of the Loan Documents, tax service
contract fees, fees of any consultants, reasonable fees and expenses of
Lender’s counsel, printing, photocopying and duplicating expenses, air freight
charges, escrow fees, premiums of hazard insurance policies and surety bonds,
market or feasibility study required by Lender, inspection fees, and Lender’s
processing and closing fees. Borrower hereby authorizes Lender to make
Disbursements to pay such expenses, charges, costs and fees notwithstanding
that Borrower may not have requested an Advance of such amount. Such
Disbursements shall be added to the outstanding principal balance of the Note.
The authorization hereby granted shall be irrevocable, and no further direction
or authorization from Borrower shall be necessary for Lender to make such
Disbursements. However, the provisions of this Section 8.9 shall not prevent
Borrower from paying such expenses, charges, costs and fees from its own funds.
All such expenses, charges, costs (including accrued interest) and fees shall
be Borrower’s obligation regardless of whether or not Borrower has requested
and met the conditions for an Advance. The obligations on the part of Borrower
under this Section 8.9 shall survive the closing of the Loans and the repayment
thereof. Borrower hereby authorizes Lender, in its discretion, to pay such
expenses, charges, costs and fees at any time by a Disbursement.

     8.11 Disclaimer by Lender. Lender shall not be liable to any Person for
services performed or materials supplied by Borrower in connection with
Borrower’s business or on behalf of Borrower. Lender shall not be liable for
any debts or claims accruing in favor of any such Person against Borrower or
others or against Borrower’s business. Borrower is not and shall not be an
agent of Lender for any purpose. Lender is not a joint venture partner with
Borrower in any manner whatsoever. Prior to default by Borrower under this
Agreement and the exercise of remedies granted herein, Lender shall not be
deemed to be in privity of contract with any contractor or provider of services
to Borrower or Borrower’s business, nor shall any payment of funds directly to
any contractor or provider of services be deemed to create any third party
beneficiary status or recognition of same by Lender. Approvals granted by Lender for any matters
covered under this Agreement shall be narrowly construed to cover only the
parties and facts identified in any written approval or, if not in writing,
such approvals shall be solely for the benefit of Borrower.

     8.12 Default Under Loan Documents. An Event of Default that arises and is
continuing under this Agreement or any other Loan Document or any Related
Document, shall be considered an Event of Default under every Loan Document and

26

 

Lender shall have the right to exercise all rights which it has under
any of the Loan Documents arising from such Event of Default.

     8.13 Indemnification. To the fullest extent permitted by law,
Borrower shall protect, indemnify, defend and save harmless Lender,
its directors, officers, agents, attorneys, and employees for, from
and against any and all liability, expense or damage of any kind or
nature incurred by any third party arising out of this Agreement or
in connection with the Loans and against any suits, claims or demands
of any third party, including reasonable legal fees and expenses on
account of any matter or thing or action or failure to act by Lender,
whether in suit or Note, arising out of this Agreement or in
connection herewith, except for matters arising out of Lender’s gross
negligence or willful misconduct or Lender’s failure to perform in
good faith under this Agreement. Upon receiving knowledge of any
suit, claim or demand asserted by a third party that Lender believes
is covered by this indemnity, Lender shall give Borrower notice of
the matter and an opportunity to defend it, at Borrower’s sole cost
and expense, with legal counsel reasonably satisfactory to Lender.
Lender may also require Borrower to so defend the matter. Borrower
further agrees that in no event shall Lender be liable for losses or
delays resulting from computer malfunction, interruption of
communication facilities, labor difficulties or other causes beyond
Bank’s reasonable control or for indirect, special or consequential
damages, and Borrower agrees to indemnify, defend and hold Lender
harmless from and against any and all claims of such losses or delays
that Borrower or any other Person may suffer or incur or claim to
have suffered or incurred, either directly or indirectly, other than
those ultimately determined to be founded on gross negligence or
willful misconduct of Lender or Lender’s failure to perform in good
faith under this Agreement. Except to the extent expressly stated
otherwise in the preceding sentence and elsewhere in this Section
8.13 with respect to third parties, this Section 8.13 shall not
require or be deemed to require the Borrower to hold Lender harmless
for Lender’s own negligence. The obligations on the part of Borrower
under this Section 8.13 shall survive the closing of this Agreement
and the repayment thereof.

     8.14 Titles and Headings. The headings at the beginning of each
section of this Agreement are solely for convenience and are not part
of this Agreement. Unless otherwise indicated, each reference in
this Agreement to a section or an exhibit is a reference to the
respective section herein or exhibit hereto.

     8.15 Brokers. Borrower and Lender represent to each other that
neither of them knows of any loan brokerage commissions or finders’
fees due or claimed with respect to the transaction contemplated
hereby. Borrower and Lender shall indemnify and hold harmless the
other party for, from and against any and all loss, damage,
liability, or expense, including costs and reasonable attorneys’
fees, which such other party may incur or sustain by reason of or in
connection with any misrepresentation by the indemnifying party with
respect to the foregoing.

     8.16 Change, Discharge, Termination, or Waiver. No provision of
this Agreement may be changed, discharged, terminated, or waived
except in writing signed

27

 

by the party against whom enforcement of the change, discharge, termination, or
waiver is sought. No failure on the part of Lender to exercise and no delay by
Lender in exercising any right or remedy under the Loan Documents or under the
law shall operate as a waiver thereof.

     8.17 Applicable Law; Jurisdiction and Venue; Waiver of Jury Trial. This
Agreement and the transactions contemplated hereunder shall be governed by and
construed in accordance with the laws of the State of Colorado without giving
effect to conflict of laws principles. In that regard, Borrower and Lender
acknowledge that all meetings and negotiations relative to the Loans have taken
place in the State of Colorado, that all Disbursements shall be made by Lender
from the State of Colorado, and that all principal and interest payments under
the Loans and the Note shall be payable to Lender in the State of Colorado.
Any suits, proceedings and other actions relating to, arising out of, or in
connection with this Agreement shall be submitted to the in personam
jurisdiction of the courts of the State of Colorado and venue for all such
suits, proceedings and other actions shall be in Denver County, Colorado. The
parties hereby waive any claim against or objection to in personam jurisdiction
and venue in the courts of Denver County, Colorado. Further, the parties
hereby waive to the maximum extent permitted under applicable law any right or
claim to a trial by jury.

     8.18 Disbursements in Excess of Loan Amount. In the event the total
Disbursements by Lender exceed the Loan Amount, to the extent permitted by the
laws of the State of Colorado, the total of all Disbursements shall be secured
by the Loan Documents. All other sums expended by Lender pursuant to this
Agreement or any other Loan Documents shall be deemed to have been paid to
Borrower and shall be secured by, among other things, the Commercial Security
Agreement. In the event of a conflict in either the Note or the Commercial
Security Agreement, the terms of this Section 8.17 shall prevail.

     8.19 Participation. Lender shall have the right at any time to sell,
assign, transfer, negotiate or grant participation in all or any part of the
Loans or the Note to one or more participants. Borrower hereby acknowledges
and agrees that any such disposition will give rise to a direct obligation of
Borrower to each such participant. If participation occurs, Lender shall
remain as lead participant and Borrower shall not incur any additional costs
associated therewith.

     8.20 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be deemed an original, but all such
counterparts together shall constitute but one agreement.

     8.21 Attorneys’ Fees. If a legal action or arbitration proceeding is
commenced in connection with any action arising out of or related to this
Agreement or any other Loan Document, then the prevailing party shall be
entitled to reasonable fees, costs, and expenses (including, without
limitation, reasonable attorneys’ fees, costs, and expenses) incurred by or on
behalf of such Person in connection with such action or proceeding, as
determined by the court or arbitrator(s). Subject to the foregoing,

28

 

Borrower
agrees to pay or reimburse Lender within five Business Days after demand for
all costs and expenses (including, without limitation, reasonable attorneys’
fees and expenses) incurred by Lender in connection with the enforcement,
attempted enforcement or preservation by Lender of any of its rights or
remedies under this Agreement or any other Loan Document during the existence
of an Event of Default or after acceleration of the obligations of Borrower
evidenced by all or any of the Loan Documents (including, without limitation,
in connection with any “workout” or restructuring regarding the Loans and/or
the Loan Documents and irrespective of whether any action or proceeding is
brought (including, without limitation, all such costs incurred in connection
with any bankruptcy, receivership, or other court proceedings (whether at the
trial or appellate level)), together with interest thereon from the date of
demand at the default interest rate set forth in the Note.

     8.22 Integration. The Loan Documents contain the complete understanding
and agreement of Borrower and Lender and supersede all prior representations,
warranties, agreements, arrangements, understandings, and negotiations.

     8.23 Binding Effect. The Loan Documents shall be binding upon, and inure
to the benefit of, Borrower, Lender, Guarantors, and their respective
successors and assigns. Borrower and Guarantors may not delegate their
obligations under the Loan Documents.

     8.24 Time of the Essence. Time is of the essence with regard to each
provision of the Loan Documents as to which time is a factor.

     8.25 Survival. The representations, warranties, and covenants of Borrower
and the Loan Documents shall survive the execution and delivery of the Loan
Documents and the closing of the Loans.

     8.26 Additional Documentation. Borrower and Guarantors shall execute any
revised documents required by Lender to correct any typographical errors or
reform any Loan Document to reflect the terms of the Loans or the loan
presentation which was the basis for approval of the Loans by Lender.

29

 

     IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to be
duly executed and delivered as of the date first written above.

	 	 	 
	

	 	BORROWER:
	 
	 	 
	

	 	Integrated Financial Systems, Inc.

a Colorado Corporation
	 
	 	 
	

	 	By: /s/ John C. Herbers

John C. Herbers, Chairman and CEO

	 
	 	 
	

	 	By: /s/ Steven C. Robbins

	

	 	Steven C.
Robbins, Director

	 
	 	 
	

	 	LENDER:
	 
	 	 
	

	 	GUARANTY BANK AND TRUST COMPANY

a Colorado state-chartered banking corporation
	 
	 	 
	

	 	By: /s/ David R. Livingston

David R. Livingston, President- Cherry Hills

30

 

EXHIBIT A

CONDITIONS TO CLOSING AND ADVANCES

     The following conditions shall be satisfied by Borrower or waived by
Lender prior to closing on the loans contemplated herein and any Advances made
by Lender:

     1. Borrower shall have provided Lender with evidence of adequate
insurance, including general liability insurance and coverage of the proposed
Collateral as described herein.

     2. Borrower shall have provided Lender with copies of executed good
standing and formation documents for Borrower and all amendments and
modifications thereto, including Articles of Incorporation, By-Laws,
Certificate of Good Standing, and borrowing resolution certified by an officer
of the Borrower.

     3. Lender shall have received a written opinion of Borrower’s counsel
satisfactory to Lender’s counsel stating, among other things, that Borrower is
duly authorized to execute the Loan Documents and that the Loan Documents are
enforceable against Borrower and Guarantors.

     4. Borrower shall have established its principal operating account and the
Pledged Account with Lender.

     5. Borrower shall have purchased a Certificate of Deposit from Lender in
an amount equal to the total of all fees paid by Hospital to Borrower for the
Initial Account Purchases, which Certificate of Deposit shall be held by Lender
as Collateral for the initial Advance against the Revolving Line of Credit Loan
and as cross-collateral for all other Advances hereunder.

31

 

PLEDGED ACCOUNT AGREEMENT

     THIS PLEDGED ACCOUNT AGREEMENT is made and entered into as of this 10th
day of February, 2003 by and among Guaranty Bank & Trust Company (“Lender”) and
Integrated Financial Systems, Inc. (“Borrower”).

     A. Pursuant to that certain Patient Account Purchase Agreement dated as of
February 10, 2003 between Borrower and Exempla Healthcare, Inc. (“Hospital”),
as amended, supplemented or otherwise modified from time to time, Hospital has
agreed to sell and Borrower has agreed to purchase certain patient accounts,
which accounts Borrower has agreed to service; and

     B. Pursuant to that certain Revolving Accounts Receivable Loan and Line of
Credit Loan Agreement dated as of February 10th, 2003 between Borrower and
Lender (as amended, supplemented or otherwise modified from time to time, the
“Agreement”), Lender has agreed to provide Borrower certain financing for
Borrower’s use in servicing the accounts purchased by Borrower from Hospital,
and Borrower has established Account No.1425828 with Lender. (the “Pledged
Account”) for the purpose of holding Receipts (as hereafter defined) of
Borrower; and

     C. The parties hereto desire to enter into this Pledged Account Agreement
in order to set forth their relative rights and duties with respect to the Pledged Account and
Receipts.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:

     1. Terms. All terms not defined in this Pledged Account Agreement shall be as
defined in the Agreement.

     2. Effectiveness. This Pledged Account Agreement shall take effect immediately
upon its execution by all parties hereto and shall supersede any blocked
account or similar agreement in effect with respect to the Pledged Account.

     3. Security Interest: As collateral security for Borrower’s obligations to
Lender under the Agreement and the other Loan Documents described therein,
Borrower for its own benefit, grants to Lender and agrees that Lender shall
have a present and continuing security interest in (a) the Pledged Account, (b)
all checks, contract rights, claims and privileges in respect of the Pledged
Account to the extent they arise from or are related to the Patient Account
Purchase Agreement or the Patient Account Credit Agreements that are the
subject of the Patient Account Purchase Agreement, and (c) to the extent they
arise from or are related to the Patient Account Purchase Agreement or the
Patient Account Credit Agreements that are the subject of the Patient Account
Purchase Agreements, all cash, checks, money orders and other items of value of
Borrower now or hereafter paid, deposited, credited, held (whether for
collection, provisionally or otherwise) or otherwise in the possession or under
the control of, or in transit to, Lender or any agent, bailee or custodian
thereof (collectively, “Receipts”).

     4. Control of Pledged Account. The Pledged Account shall be under the sole
dominion and control of the Lender and shall be maintained by Lender in the
name of the Borrower. Lender shall have the irrevocable right and power to
periodically, and not less than monthly, disburse funds from the Pledged
Account to make payments of principal and interest due pursuant to the
Agreement. Borrower shall have the right to withdraw funds in excess of those
currently due to Lender under the Agreement. Borrower agrees that all payments
to it made on or for patient accounts subject to the Patient Account Purchase
Agreement shall be promptly

 

 

deposited in the Pledged Account. Borrower agrees that all payments
Hospital may make to Borrower for repurchase of accounts pursuant to the
Patient Account Purchase Agreement, if any, shall be deposited in the Pledged
Account. Borrower agrees that Lender shall have the right to restrict
withdrawals from the Pledged Account if the Lender in good faith has reason to
believe that Borrower will not be able to make required payments to Lender
pursuant to the terms of the Agreement. Lender her agrees that Borrower may
make any withdrawal from the Pledged Account necessary to satisfy any
obligation of the Borrower under the Agreement including, without limitation;

     a. Miscellaneous withdrawals, without limitation, for late charges,
insufficient funds or payments sent to an incorrect location. Such
withdrawals will be made to an operating account of Borrower.

     b. Withdrawal of interest differential between the interest charged
to Borrower by Lender for the prior month and the interest collected from
Patient Account Credit Agreements for the prior month. Such withdrawals
will be made to an operating account of Borrower.

     c. Withdrawal of principal to be paid to hospital in the amounts
received by Borrower for each Patient Account Credit Agreement in excess
of the amount advanced by Lender to purchase each such Patient Account
Credit Agreement.

     d. Withdrawal of IFS’ Service Fee as defined in the Patient Account
Purchase Agreement.

     For each withdrawal Borrower shall submit documentation to the Lender
pursuant to the IFC/Guaranty Bank Lockbox Reporting and Distribution Procedures
to be mutually agreed upon.

     5. Fees. Borrower agrees to pay on demand all reasonable usual and
customary service charges, transfer fees and account maintenance fees
(collectively, “Fees”) of Lender in connection with the Pledged Account. In the
event Borrower fails to timely make a payment to Lender of any Fees, Lender may
thereafter exercise its right of setoff against the Pledged Account for such
amounts.

     6. Setoff: Lender may exercise or claim any right of setoff or banker’s
lien against the Pledged Account or any Receipts, and Lender may exercise such
right or lien which it may have against any Receipts whether or not yet
deposited in the Pledged Account, including without limitation to the extent
expressly set forth in paragraphs 3 and 5 above.

     7. Exculpation of Lender: Indemnification by Borrower. Borrower agrees to
indemnify and Defend Lender (through counsel of Lender’s selection) and hold
Lender harmless from and against any and all third party claims suits or
demands, including without limitation any claims asserted either directly or
indirectly by Hospital, other than those ultimately determined to be founded on
gross negligence or willful misconduct of Lender or by the failure of the
Lender to comply with the terms and conditions of this Pledged Account
Agreement, and from and against any damages, penalties, judgments, liabilities,
losses or expenses (including reasonable attorney’s fees, costs and
disbursements) incurred as a result of the assertion of any claim, by any third
party, arising out of, or otherwise related to: 1) any act or omission of
Lender; 2) any transaction conducted or service provided by Lender contemplated
by this Pledged Account Agreement, the Loan Agreement or the Patient Account
Purchase Agreement, or 3) the use of any account at Lender contemplated by this
Pledged Account Agreement; other than those ultimately determined to be founded
on gross negligence or willful misconduct of Lender or by the failure of Lender
to comply with the terms and conditions of this Pledged

2

 

Account Agreement. In no event shall Lender be liable for losses or delays
resulting from computer malfunction, interruption of communication facilities,
labor difficulties or other causes beyond Lender’s reasonable control or for
indirect, special or consequential damages. Borrower agrees to indemnify,
defend and hold Lender mess from and against any and all claims of such losses
or delays that Borrower or any other person may suffer or incur or claim to
have suffered or incurred, either directly or indirectly, other than those
ultimately determined to be founded on gross negligence or willful misconduct
of Lender. Except to the extent expressly stated otherwise in the preceding
sentence and elsewhere in this paragraph 7 with respect to third parties, this
paragraph 7 shall not require or be deemed to require the Borrower to hold
Lender harmless for Lender’s own negligence. The obligations on the part of
Borrower under this paragraph 7 shall survive the termination of this Pledged
Account Agreement. Borrower agrees that Lender’s right of set-off shall extend
to costs and expenses incurred by Lender (including reasonable attorney’s fees,
costs and disbursements) arising from this indemnification, hold harmless and
defense agreement.

     8. Termination. This Agreement may be terminated by Borrower only upon
receipt by Lender of written notification thereof. This Agreement may be
terminated by Lender only upon delivery to Borrower of written notification
thereof. Upon receipt by Lender of such written notice of termination by
Borrower, or upon delivery to Borrower of written notification of termination
by Lender, Borrower understands and agrees that, without limiting its right to
exercise any other remedy it may have, upon the expiration of ten (10) days
written notice to the Borrower, Lender will exercise its right pursuant to
paragraph 8 of the Patient Account Purchase Agreement to demand Hospital
repurchase all accounts assigned to and purchased by Borrower. The effective
date of termination of this Pledged Account Agreement shall be the date of
receipt of payment by Lender of all amounts due pursuant to Lender’s demand
that Hospital repurchase all accounts. Upon delivery of written notification of
termination, Borrower consents and agrees to any restriction on withdrawals
reasonably imposed by Lender for the purpose of assuring payment of amounts due
to Lender under this Pledged Account Agreement or the Agreement or pursuant to
any transaction or service contemplated by either of them. At such time as
Lender shall have received from Borrower and/or Hospital all amounts due and
owing to Lender under this Pledged Account Agreement or the Agreement, Lender
shall disburse any remaining balance in the Pledged Account to Borrower.

     9. Irrevocable Agreements. Borrower acknowledges that the agreements made
by it and the authorizations granted by it in paragraphs 3 and 4 hereof are
irrevocable and that the authorizations granted in paragraphs 3 and 4 hereof
are powers coupled with an interest.

     10. Notices. Notice shall be made in writing by such means of delivery
that receipt cannot properly be denied. All notices, requests or other
communications given to Borrower or Lender shall be given in writing to the
individuals at the address specified below and, except to the extent provided
otherwise herein, shall be deemed duly given when deposited in the US mail to
the parties at their addresses below or to any subsequent persons or at
subsequent addresses provided to the other party in writing:

	 	 	 
	Lender:

	 	Guaranty Bank & Trust Company

1331 17th Street

PO Box 5847

Denver, CO 80217

Attention: Kathy Kufeldt
	 
	Borrower:

	 	President

Integrated Financial Systems, Inc.

7807 E. Peakview Ave., Suite 300

Greenwood Village, Colorado 80111

3

 

     With a mandatory copy to Steven C. Robbins and John C. Herbers at the
address of Borrower set forth above.

     11. Miscellaneous.

          a. This Pledged Account Agreement may be amended only by a written
instrument executed by Lender and Borrower acting by their duly authorized
representatives.

          b. This Pledged Account Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

          c. This Pledged Account Agreement shall also constitute a “Control
Agreement” for purposes of perfection of Lender’s security interests under the
Uniform Commercial Code.

          d. This Pledged Account Agreement shall be governed and controlled by the
laws of the State of Colorado without regard to conflict of law principles.

IN WITNESS WHEREOF, each of the parties has executed and delivered this Pledged
Account Agreement as of the day and year first above set forth.

	 	 	 	 	 
	GUARANTY BANK AND TRUST COMPANY

 	 
	By:  	/s/ David
R. Livingston	 
	Title: President 	 
	 	 	 	 
	 

	 	 	 	 	 
	INTEGRATED FINANCIAL SYSTEMS, INC.

 	 
	 	By:  	/s/ John C. Hebers
 	 
	Title: President 	 
	 	 	 	 
	 

4

 

GUARANTY BANK

AND TRUST COMPANY

August 5, 2004

Mr. Steven C. Robbins

Integrated Financial Systems, Inc.

7807 E. Peakview Avenue, Suite 300

Greenwood Village, CO 80111

Re: Renewal of Loan #8600025-001

Dear Mr. Robbins:

Guaranty Bank and Trust will renew this $10,000,000 Revolving Line of Credit to
November 5, 2004. All other terms and conditions remain the same.

Please feel free to call if there are any questions.

Sincerely,

/s/ David R. Livingston

David R. Livingston

President, Cherry Hillsexv10w11

 

EXHIBIT 10.11

ESCROW AGREEMENT

     ESCROW AGREEMENT, effective as of the                      day of August, 2004, by and
among the shareholders listed on Exhibit A to this Escrow Agreement (the
“Shareholders” or “Shareholder”) of INTEGRATED FINANCIAL SERVICES, INC., a
Colorado corporation (the ‘Company”), J.P. TURNER & COMPANY, L.L.C. (the
“Representative”) and CORPORATE STOCK TRANSFER, INC. (the “Escrow Agent”).

     WHEREAS, the Shareholders are the record and beneficial owners of certain
shares of the Company’s common stock (“Common Stock”) all as more fully
reflected on Exhibit A to this Escrow Agreement; and

     WHEREAS, the Company and the Representative of the several underwriters
(the “Underwriters’) intend to enter into an underwriting agreement (the
“Underwriting Agreement”) pursuant to which the Company will sell Common Stock
in a public offering pursuant to the registration provisions of the Securities
Act of 1933, as amended (the “1933 Act”); and

     WHEREAS, as a condition to closing the proposed public offering of the
Company (the “Offering”), the Representative has required the Shareholders to
deposit an aggregate of 250,000 shares of Common Stock owned by such
Shareholders in Escrow with the Escrow Agent as reflected on Exhibit A (the
“Escrow Shares”); and

     WHEREAS, the Shareholders wish to deposit the Escrow Shares in Escrow in
order to fulfill the requirements of the Underwriting Agreement;

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, terms and conditions hereinafter set forth, the parties to this
Escrow Agreement agree as follows:

     SECTION 1. DESIGNATION AND DEPOSIT OF ESCROW SHARES.

          (a) The Escrow Shares to be deposited pursuant to this Escrow Agreement
consist of 250,000 shares of Common Stock of the Company and are owned of
record as of the date of this Escrow Agreement by the Shareholders identified
on Exhibit A.

          (b) On the date on which the Securities and Exchange Commission declares
the Company’s Registration Statement on Form SB-2 (Reg. No. 333-         )
effective under the 1933 Act (the “Effective Date”) , the Shareholders shall
deliver to the Escrow Agent any and all certificates representing the Escrow
Shares and a stock power endorsed in blank with a medallion guarantee.
Promptly after the Effective Date, the Escrow Agent shall deliver a receipt
therefor and, if requested by a Shareholder, a new certificate representing
each Shareholder’s share of Common Stock represented by the certificates
delivered but which are not subject to this Escrow Agreement.

     SECTION 2. TITLE OF ACCOUNT. All certificates representing the Escrow
Shares delivered to the Escrow Agent pursuant to this Agreement shall be
deposited on the Effective Date by the Escrow Agent in an account
designated substantially as follows: “Integrated Financial Services, Inc.
Escrow Share Account” (the “Escrow Account”).

 

 

     SECTION 3. TRANSFER OF ESCROW SHARES DURING ESCROW PERIOD. During the
Escrow Period (as defined below) none of the Escrow Shares deposited in the
Escrow Account shall be sold, pledged, hypothecated or otherwise transferred or
delivered out of the Escrow Account except transfers by operation of law.

     SECTION 4. DURATION OF ESCROW PERIOD.

          (a) The Escrow Period shall commence on the Effective Date and shall
terminate on the earlier of the date on which all Escrow Shares have been
returned to the Shareholders pursuant to Sections 6(a), 6(b), 6(c) or 6(d)
below.

          (b) This Agreement shall be of no force or effect in the event the
Underwriting Agreement is not executed on the Effective Date in accordance with
its terms.

     SECTION 5. RECEIPT OF DISTRIBUTIONS AND DIVIDENDS. During the term of the
Escrow Period, if the Company issues any distributions, dividends, rights or
other property with respect to the Common Stock, then, in such event, the
Company shall be authorized to send evidence of such distributions, dividends,
rights or other property directly to the Escrow Agent, which is hereby
authorized to hold and retain possession of all such evidences of
distributions, dividends, rights or other property until termination of the
Escrow Period in accordance with Section 6 below. At such time as the Escrow
Shares are distributed to the Shareholders pursuant to Sections 6(a), 6(b),
6(c) or 6(d) below, then the Escrow Agent will distribute evidences of such
distributions, dividends, rights, or other property in the form the Escrow
Agent received such distributions, dividends, rights, or other property from
the Company. If the Company recapitalizes, splits or combines its shares, such
shares shall be substituted on a pro rata basis for the Escrow Shares. The
Company will notify the Escrow Agent of the occurrence of the events listed in
this section.

     SECTION 6. RELEASE AND DELIVERY OF ESCROW SHARES.

          (a) In the event the Escrow Agent receives written notice from the
Representative and the Company confirming that the Company had gross revenues
of $15,000,000 and after tax net income of $3,000,000 in fiscal 2005, the
Escrow Agent shall return to each Shareholder a certificate for his portion of
the Escrow Shares as are listed on Exhibit A. The Escrow Agent shall return
the Escrow Shares only to the person or entity named as the holder of record in
Exhibit A to this Escrow Agreement, as modified by any transfers made pursuant
to Section 3 above.

          (b) In the event the Escrow Agent receives written notice from the
Representative and the Company confirming the Company had gross revenues of
$40,000,000 after tax net income of $12,000,000 in fiscal year 2006, the Escrow
Agent shall return to each Shareholder a certificate for his portion of the
Escrow Shares as are listed on Exhibit A. The
Escrow Agent shall return each certificate only to the person or entity
named as the holder of record in Exhibit A hereto, as modified by any transfers
made pursuant to Section 3 above.

          (c) In the event the Escrow Agent receives written notice from the
Representative and the Company confirming that the Company has been merged or
consolidated, or has executed a share exchange, with another company which is
the survivor to the transaction

2

 

or in which the stockholders of the Company own
less that 50% of the outstanding capital stock of the surviving entity, or that
the Company has sold all or substantially all of its assets and the relevant
transaction was approved by the holders of a majority of the Company’s
outstanding voting securities exclusive of the Escrow Shares held hereunder,
the Escrow Agent shall contemporaneously with the closing of any such
transaction return to each Shareholder a certificate for his share of the
Escrow Shares as are listed on Exhibit A. The Escrow Agent shall return each
certificate only to the person or entity named as the holder of record in
Exhibit A hereto, as modified by any transfers made pursuant to Section 3
above.

          (d) In the event none of the criteria for release specified in
subparagraphs (a) , (b) or (c) above is reached by the Company, the Escrow
Shares shall remain in the Escrow Account until a date that is three years from
the Effective Date. Upon termination of the Escrow Period pursuant to the
provisions of this Section 6(d), the Escrow Agent shall, as promptly as
possible, return to each Shareholder a certificate for its share of the Escrow
Shares as are listed on Exhibit A. The Escrow Agent shall return each
certificate only to the person named as the holder of record in Exhibit A
hereto, as modified by any transfers made pursuant to Section 3 above.

          (e) At such time as the Escrow Agent shall have returned all Escrow Shares
as provided in this Section, the Escrow Agent shall be discharged completely
and released from any and all further liabilities and responsibilities under
this Escrow Agreement.

          (f) The determination of the criteria described above shall be solely the
responsibility of the Company and the Representative, and the Escrow Agent
shall have no liability or responsibility therefor.

     SECTION 7. VOTING RIGHTS. During the Escrow Period, each Shareholder, or
any transferee receiving all or a portion of the Escrow Shares of such
Shareholder pursuant to Section 3 of this Escrow Agreement, shall have the
right to vote such Escrow Shares (to the extent the Escrow Shares have voting
rights) at any and all shareholder meetings without restriction.

     SECTION 8. LIMITATION OF LIABILITY OF ESCROW AGENT. In acting pursuant to
this Escrow Agreement, the Escrow Agent shall be protected fully in every
reasonable exercise of its discretion and shall have no obligation hereunder to
either the Shareholders or to any other party except as expressly set forth
herein. In performing any of its duties hereunder, the Escrow Agent shall not
incur any liability to any person for any damages, losses or expenses, except
for willful default or negligence and it shall, accordingly, not incur any such
liability with respect to (1) any action taken or omitted in good faith upon
advice of its counsel, counsel for the Company or counsel for the
Representative given with respect to any
questions relating to the duties and responsibilities of the Escrow Agent
under this Agreement, and (2) any action taken or omitted in reliance upon any
instrument, including written notices provided for herein, not only to its due
execution and validity and effectiveness of its provisions, but also to the
truth and accuracy of any information contained therein, which the Escrow Agent
shall in good faith believe to be genuine, to have been signed and presented by
a proper person or persons and to be in compliance with the provisions of this
Agreement.

3

 

     SECTION 9. INDEMNIFICATION. The Company, the Representative and the
Shareholders shall indemnify and hold harmless the Escrow Agent against any and
all losses, claims, damages, liabilities and expenses, including reasonable
costs of investigation and counsel fees and disbursements, which may be imposed
upon the Escrow Agent or incurred by Escrow Agent in connection with its
acceptance of appointment as Escrow Agent or the performance of its duties
hereunder, including any litigation arising from this Escrow Agreement or
involving the subject matter of this Escrow Agreement.

     SECTION 10. PAYMENT OF FEES. The Company shall be responsible for all
reasonable fees and expenses of the Escrow Agent incurred by it in the course
of performing under this Escrow Agreement.

     SECTION 11. CHANGE OF ESCROW AGENT. In the event the Escrow Agent
notifies the Company and the Representative that it desires to terminate its
duties as Escrow Agent, or in the event the Escrow Agent files for protection
under the United States Bankruptcy Code or is liquidated or ceases operations
for any reason, the Company and the Representative shall have the right to
jointly designate a replacement Escrow Agent who shall succeed to the rights
and duties of the Escrow Agent hereunder. Any such replacement Escrow Agent
shall be a trust or stock transfer company experienced in stock transfer,
escrow and related matters and shall have a minimum net worth of $5 million.
Upon appointment of such successor Escrow Agent, the Escrow Agent shall be
discharged from all duties and responsibilities hereunder.

     SECTION 12. NOTICES. All notices, demands or requests required or
authorized hereunder shall be deemed given sufficiently if in writing and sent
by registered mail or certified mail, return receipt requested and postage
prepaid and by facsimile or cable:

	 
	In the case of the Representative to:

	 

	J.P. Turner & Company, L.L.C.

	5445 DTC Parkway, Suite 940

	Greenwood Village, Colorado 80111

	 

	Attention: Keith A. Koch, Director of Investment Banking, Denver

	 

	With a copy to (which shall not constitute notice):

	 

	Moye Giles LLP

	1225 Seventeenth Street, #2900

	Denver, Colorado 80202

	 

	Attention: David C. Roos, Esq.

4

 

	 
	In the case of the Escrow Agent to:

	 

	Corporate Stock Transfer, Inc.

	3200 Cherry Creek Drive

	Denver, Colorado 80209

	 

	Attention: Carylyn K. Bell, President

	 

	In the case of the Company to:

	 

	Integrated Financial Systems, Inc.

	7807 East Peakview Avenue, Suite 300

	Greenwood Village, CO 80111

	 

	Attention: John C. Herbers, President

	 

	With a copy to (which shall not constitute notice):

	 

	Jones & Keller, P.C.

	1625 Broadway, 16th Floor

	Denver, Colorado 80202

	 

	Attention: Reid A. Godbolt, Esq.

     In the case of the Shareholders, to the addresses on the records of the
Escrow Agent.

     SECTION 13. COUNTERPARTS. This Escrow Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same Escrow Agreement. Facsimile signatures shall
be accepted as original signatures for all purposes.

     SECTION 14. GOVERNING LAW. The validity, interpretation and construction
of this Escrow Agreement and of each part hereof shall be governed by the laws
of the State of Colorado.

     SECTION 15. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties hereto in reference to all the
matters herein agreed upon.

     IN WITNESS WHEREOF, the Shareholders, the Company, the Representative and
the Escrow Agent have executed this Escrow Agreement to be effective as of the
day and year first above written.

	 	 	 	 	 
	

	 	CORPORATE STOCK TRANSFER, INC.:
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	Title:	 	 
	

	 	 	 	
 

5

 

	 	 	 	 	 
	 
	 	 	 	 
	

	 	INTEGRATED FINANCIAL SERVICES, INC.
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	John C. Herbers, President
	 
	 	 	 	 
	

	 	J.P. TURNER & COMPANY, L.L.C.:
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	
 
	

	 	 	 	Keith Koch, Director of
	

	 	 	 	Investment Banking, Denver
	 
	 	 	 	 
	

	 	THE SHAREHOLDERS:
	 
	 	 	 	 
	 
	 	 	 	 
	

	 	
 
	

	 	John C. Herbers
	 
	 	 	 	 
	 
	 	 	 	 
	

	 	
 
	

	 	Steven C. Robbins

6

 

EXHIBIT A

TO ESCROW AGREEMENT

	 	 	 	 	 
	NAME	 	TOTAL SHARES
	 	 	 	 	 	 
	John C. Herbers

	 	 	 	 
	

	 	 	
 	 
	Steven C. Robbins

	 	 	 	 
	

	 	 	
 	 
	TOTAL:

	 	 	250,000

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