Document:

Line of Credit Agreement between the Company and First Community Bank

 Exhibit 10.1 
  
 BUSINESS LOAN AGREEMENT (ASSET BASED) 
  

															
	 Principal
$500,000.00

	  	 Loan Date
 04-16-2004

	  	 Maturity
 04-16-2005

	  	 Loan No
 71736

	  	 Call / Coll
 482

	  	 Account

	  	 Officer
 301

	  	 Initials

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

  

							
	Borrower:	  	 VERTICAL HEALTH SOLUTIONS INC (TIN: 59-3635262)
 855 DUNBAR AVE
 OLDSMAR, FL 34677
	  	Lender:	  	 First Community Bank of America
 St. Petersburg
Office 6100 4th Street North
 St. Petersburg, FL 33703
 (727) 520-8837

  
 THIS BUSINESS LOAN AGREEMENT (ASSET BASED) dated April 16, 2004, is made and executed between VERTICAL HEALTH SOLUTIONS INC (“Borrower”) and First Community Bank of America (“Lender”) on the
following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule
attached to this Agreement (“Loan”). Borrower understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower’s representations, warranties, and agreements as set forth in this Agreement;
(B) the granting, renewing, or extending of any Loan by Lender at all times shall be subject to Lender’s sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

  
 TERM. This Agreement shall be effective as of April 16, 2004, and
shall continue in full force and effect until such time as all of Borrower’s Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys’ fees, and other fees and charges, or until April 16,
2005. 
  
 LINE OF CREDIT. Lender agrees to make Advances to Borrower from
time to time from the date of this Agreement to the Expiration Date, provided the aggregate amount of such Advances outstanding at any time does not exceed the Borrowing Base. Within the foregoing limits, Borrower may borrow, partially or wholly
prepay, and reborrow under this Agreement as follows: 
  
 Conditions Precedent to Each Advance. Lender’s obligation to make any Advance to or for the account of Borrower under this Agreement is subject to the following conditions precedent, with all documents, instruments, opinions,
reports, and other items required under this Agreement to be in form and substance satisfactory to Lender: 
  
 (1) Lender shall have received evidence that this Agreement and all Related Documents have been duly authorized, executed, and delivered by Borrower to
Lender. 
  
 (2) Lender shall have received such opinions of
counsel, supplemental opinions, and documents as Lender may request. 
  
 (3) The security interests in the Collateral shall have been duly authorized, created, and perfected with first lien priority and shall be in full force and effect. 
  
 (4) All guaranties required by Lender for the credit facility(ies) shall have been executed by each Guarantor, delivered to
Lender, and be in full force and effect. 
  
 (5) Lender, at its
option and for its sole benefit, shall have conducted an audit of Borrower’s Accounts, Inventory, books, records, and operations, and Lender shall be satisfied as to their condition. 
  
 (6) Borrower shall have paid to Lender all fees, costs, and expenses
specified in this Agreement and the Related Documents as are then due and payable. 
  
 (7) There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement, and Borrower shall have delivered to Lender the compliance certificate called for in
the paragraph below titled “Compliance Certificate.” 
  
 Making Loan Advances. Advances under this credit facility, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by authorized persons. Lender may, but need not, require that all oral
requests be confirmed in writing. Each Advance shall be conclusively deemed to have been made at the request of and for the benefit of Borrower (1) when credited to any deposit account of Borrower maintained with Lender or (2) when advanced in
accordance with the instructions of an authorized person. Lender, at its option, may set a cutoff time, after which all requests for Advances will be treated as having been requested on the next succeeding Business Day. 
  
 Mandatory Loan Repayments. If at any time the aggregate principal
amount of the outstanding Advances shall exceed the applicable Borrowing Base, Borrower, immediately upon written or oral notice from Lender, shall pay to Lender an amount equal to the difference between the outstanding principal balance of the
Advances and the Borrowing Base. On the Expiration Date, Borrower shall pay to Lender in full the aggregate unpaid principal amount of all Advances then outstanding and all accrued unpaid interest, together with all other applicable fees, costs and
charges, if any, not yet paid. 
  
 Loan Account. Lender
shall maintain on its books a record of account in which Lender shall make entries for each Advance and such other debits and credits as shall be appropriate in connection with the credit facility. Lender shall provide Borrower with periodic
statements of Borrower’s account, which statements shall be considered to be correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days after Borrower’s receipt of any such
statement which Borrower deems to be incorrect. 
  
 COLLATERAL. To secure
payment of the Primary Credit Facility and performance of all other Loan, obligations and duties owed by Borrower to Lender, Borrower (and others, if required) shall grant to Lender Security Interests in such property and assets as Lender may
require. Lender’s Security Interests in the Collateral shall be continuing liens and shall include the proceeds and products of the Collateral, including without limitation the proceeds of any insurance. With respect to the Collateral, Borrower
agrees and represents and warrants to Lender: 
  
 Perfection
of Security Interests. Borrower agrees to execute financing statements and all documents perfecting Lender’s Security Interest and to take whatever other actions are requested by Lender to perfect and continue Lender’s Security
Interests in the Collateral. Upon request of Lender, Borrower will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Borrower will note Lender’s interest upon any and all chattel paper and instruments
if not delivered to Lender for possession by Lender. Contemporaneous with the execution of this Agreement, Borrower will execute one or more UCC financing statements and any similar statements as may be required by applicable law, and Lender will
file such financing statements and all such similar statements in the appropriate location or locations. Borrower hereby appoints Lender as its irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect or to
continue any Security Interest. Lender may at any time, and without further authorization from Borrower, file a carbon, photograph, facsimile, or other reproduction of any financing statement for use as a financing statement. Borrower will reimburse
Lender for all expenses for the perfection, termination, and the continuation of the perfection of Lender’s security interest in the Collateral. Borrower promptly will notify Lender before any change in Borrower’s name including any change
to the assumed business names of Borrower. Borrower also promptly will notify Lender before any change in Borrower’s Social Security Number or Employer Identification Number. Borrower further agrees to notify Lender in writing prior to any
change in address or location of Borrower’s principal governance office or should Borrower merge or consolidate with any other entity. 
  
 Collateral Records. Borrower does now, and at all times hereafter shall, keep correct and accurate records of the Collateral, all of which records
shall be available to Lender or Lender’s representative upon demand for inspection and copying at any reasonable time. With respect to the Accounts, Borrower agrees to keep and maintain such records as Lender may require, including without
limitation information concerning Eligible Accounts and Account balances and agings. Records related to Accounts (Receivables) are or will be located at . With respect to the Inventory, Borrower agrees to keep and maintain such records as Lender may
require, including without limitation information concerning Eligible Inventory and records itemizing and describing the kind, type, quality, and quantity of Inventory, Borrower’s Inventory costs and selling prices, and the daily withdrawals
and additions to Inventory. Records related to Inventory are or will be located at . The above is an accurate and complete list of all locations at which Borrower keeps or maintains business records concerning Borrower’s collateral. 

 
 Collateral Schedules. Concurrently with the execution and delivery
of this Agreement, Borrower shall execute and deliver to Lender schedules of Accounts and Inventory and schedules of Eligible Accounts and Eligible Inventory in form and substance satisfactory to the Lender. Thereafter supplemental schedules shall
be delivered according to the following schedule: 
  
 Representations and Warranties Concerning Accounts. With respect to the Accounts, Borrower represents and warrants to Lender: (1) Each Account represented by Borrower to be an Eligible Account for purposes of this Agreement conforms
to the requirements of the definition of an Eligible Account; (2) All Account information listed on schedules delivered to Lender will be true and correct, subject to immaterial variance; and (3) Lender, its assigns, or agents shall have the right
at any time and at Borrower’s expense to inspect, examine, and audit Borrower’s records and to confirm with Account Debtors the accuracy of such Accounts. 
  
 Representations and Warranties Concerning Inventory. With respect to the Inventory, Borrower represents and warrants
to Lender: (1) All Inventory represented by Borrower to be Eligible Inventory for purposes of this Agreement conforms to the requirements of the definition of 

  

					
	BUSINESS LOAN AGREEMENT (ASSET BASED)
	Loan No: 71736	  	(Continued)	  	Page 2

  

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

  
 Fees and Expenses Under This Agreement. Borrower shall
have paid to Lender all fees, costs, and expenses specified in this Agreement and the Related Documents as are then due and payable. 
  
 Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or
certificate delivered to Lender under this Agreement are true and correct. 
  
 No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document. 
  
 REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the
date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists: 
  
 Organization. Borrower is a corporation for profit which is, and at
all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Florida. Borrower is duly authorized to transact business in all other states in which Borrower is doing business, having
obtained all necessary filings, governmental licenses and approvals for each state in which Borrower is doing business. Specifically, Borrower is, and at all times shall be, duly qualified as a foreign corporation in all states in which the failure
to so qualify would have a material adverse effect on its business or financial condition. Borrower has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage.
Borrower maintains its principal office at 855 DUNBAR AVENUE, OLDSMAR, FL 33773. Unless Borrower has designated otherwise in writing, this is the principal office at which Borrower keeps its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the location of Borrower’s state of organization or any change in Borrower’s name. Borrower shall do all things necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to Borrower and Borrower’s business activities.

  
 Assumed Business Names. Borrower has filed or recorded
all documents or filings required by law relating to all assumed business names used by Borrower. Excluding the name of Borrower, the following is a complete list of all assumed business names under which Borrower does business: None.

  
 Authorization. Borrower’s execution, delivery,
and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower’s
articles of incorporation or organization, or bylaws, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower’s properties. 

 
 Financial Information. Each of Borrower’s financial
statements supplied to Lender truly and completely disclosed Borrower’s financial condition as of the date of the statement, and there has been no material adverse change in Borrower’s financial condition subsequent to the date of the most
recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements. 
  
 Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will
constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms. 
  
 Properties. Except as contemplated by this Agreement or as previously disclosed in Borrower’s financial statements or in writing to Lender and
as accepted by Lender, and except for property tax liens for taxes not presently due and payable. Borrower owns and has good title to all of Borrower’s properties free and clear of all Security Interests, and has not executed any security
documents or financing statements relating to such properties. All of Borrower’s properties are titled in Borrower’s legal name, and Borrower has not used or filed a financing statement under any other name for at least the last five (5)
years. 
  
 Hazardous Substances. Except as disclosed to
and acknowledged by Lender in writing, Borrower represents and warrants that: (1) During the period of Borrower’s ownership of Borrower’s Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any
use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened
litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release
any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all
Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any
inspections or tests made by Lender shall be at Borrower’s expense and for Lender’s purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The
representations and warranties contained herein are based on Borrower’s due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses
which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or
substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be
affected by Lender’s acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise. 
  
 Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower’s financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and
acknowledged by Lender in writing. 
  
 Taxes. To the best
of Borrower’s knowledge, all of Borrower’s tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to
be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided. 
  
 Lien Priority. Unless otherwise previously disclosed to Lender in writing, Borrower has not entered into or granted any Security Agreements, or
permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower’s Loan and Note, that would be prior or that may in any way be superior to Lender’s
Security Interests and rights in and to such Collateral. 
  
 Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in
accordance with their respective terms. 
  

					
	BUSINESS LOAN AGREEMENT (ASSET BASED)
	Loan No: 71736	  	(Continued)	  	Page 3

  

 AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, so long as this Agreement remains in
effect, Borrower will: 
  
 Notices of Claims and Litigation.
Promptly inform Lender in writing of (1) all material adverse changes in Borrower’s financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting
Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor. 
  
 Financial Records. Maintain its books and records in accordance with GAAP, applied on a consistent basis, and permit Lender to examine and audit
Borrower’s books and records at all reasonable times. 
  
 Financial Statements. Furnish Lender with the following: 
  
 Annual Statements. As soon as available, but in no event later than sixty (60) days after the end of each fiscal year, Borrower’s balance sheet and income statement for the year ended, compiled by a
certified public accountant satisfactory to Lender. 
  
 Tax
Returns. As soon as available, but in no event later than sixty (60) days after the applicable filing date for the tax reporting period ended. Federal and other governmental tax returns, prepared by a certified public accountant satisfactory to
Lender. 
  
 Additional Requirements. Borrower is required
to submit monthly Accounts Receivable Aging and Inventory Levels . 
  
 All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, applied on a consistent basis, and certified by Borrower as being true and correct. 
  
 Additional Information. Furnish such additional information and
statements, as Lender may request from time to time. 
  
 Insurance. Maintain fire and other risk insurance, public liability insurance, and such other insurance as Lender may require with respect to Borrower’s properties and operations, in form, amounts, coverages and with insurance
companies acceptable to Lender. Borrower, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or
diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower
or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender’s loss payable or other endorsements as Lender may
require. 
  
 Insurance Reports. Furnish to Lender, upon
request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4)
the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not
more often than annually). Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower. 
  
 Guaranties. Prior to disbursement of any Loan proceeds, furnish
executed guaranties of the Loans in favor of Lender, executed by the guarantors named below, on Lender’s forms, and in the amounts and under the conditions set forth in those guaranties. 
  

			
	 Names of Guarantors

	  	Amounts

	 JUGAL TANEJA
	  	Unlimited
	 STEPHEN WATTERS
	  	Unlimited

  
 Other Agreements.
Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.

  
 Loan Proceeds. Use all Loan proceeds solely for
Borrower’s business operations, unless specifically consented to the contrary by Lender in writing. 
  
 Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes,
governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge
upon any of Borrower’s properties, income, or profits. 
  
 Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower
shall notify Lender immediately in writing of any default in connection with any agreement. 
  
 Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any
change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner. 
  
 Environmental Studies. Promptly conduct and complete, at Borrower’s expense, all such investigations, studies, samplings and testings as may
be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or
directive, at or affecting any property or any facility owned, leased or used by Borrower. 
  
 Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower’s properties,
businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance, or regulation and withhold compliance during any
proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in Lender’s sole opinion. Lender’s interests in the Collateral are not jeopardized. Lender may require Borrower
to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender’s interest. 
  
 Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and Borrower’s
other properties and to examine or audit Borrower’s books, accounts, and records and to make copies and memoranda of Borrower’s books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without
limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party. Borrower, upon request of Lender, shall notify such party to permit Lender free access to such records at
all reasonable times and to provide Lender with copies of any records it may request, all at Borrower’s expense. 
  
 Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a
result of an intentional or unintentional action or omission on Borrower’s part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such
environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after
receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower’s part in
connection with any environmental activity whether or not there is damage to the environment and/or other natural resources. 
  
 Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments,
financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests. 
  
 LENDER’S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender’s interest in the
Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower’s failure to discharge or pay when due any amounts Borrower is required to discharge or pay under
this Agreement or any Related Documents, Lender on Borrower’s behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests,
encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at
the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by Borrower. All such expenses will become a part of the Indebtedness and, at Lender’s option, will (A) be payable on demand; (B) be added to the
balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment
which will be due and payable at the Note’s maturity. 
  
 CESSATION OF
ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement. Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any
Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a
petition in bankruptcy or similar proceedings. 

  

					
	BUSINESS LOAN AGREEMENT (ASSET BASED)
	Loan No: 71736	  	(Continued)	  	Page 4

  

 
or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower’s financial condition, in the financial condition of any Guarantor, or
in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor’s guaranty of the Loan or any other loan with Lender; or (E) Lender in good faith deems itself
insecure, even though no Event of Default shall have occurred. 
  
 RIGHT OF
SETOFF. To the extent permitted by applicable law. Lender reserves a right of setoff in all Borrower’s accounts with Lender (whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone
else and all accounts Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable
law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at Lender’s option, to administratively freeze all such accounts to allow Lender to protect Lender’s charge and setoff rights provided in
this paragraph. 
  
 DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:  
  
 Payment
Default. Borrower fails to make any payment when due under the Loan. 
  
 Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any
term, obligation, covenant or condition contained in any other agreement between Lender and Borrower. 
  
 Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower’s or any Grantor’s property or Borrower’s or any Grantor’s ability to repay the Loans or perform their
respective obligations under this Agreement or any of the Related Documents. 
  
 False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower’s behalf under this Agreement or the Related Documents is false or misleading in any
material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. 
  
 Insolvency. The dissolution or termination of Borrower’s existence as a going business, the insolvency of Borrower, the appointment of a
receiver for any part of Borrower’s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower. 
  
 Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. 
  
 Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of Borrower’s accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender
written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for
the dispute. 
  
 Events Affecting Guarantor. Any of the
preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. In the event of a death.
Lender, at its option, may, but shall not be required to, permit the Guarantor’s estate to assume unconditionally the obligations arising under the guaranty in a manner satisfactory to Lender, and, in doing so, cure any Event of Default.

  
 Change in Ownership. Any change in ownership of
twenty-five percent (25%) or more of the common stock of Borrower. 
  
 Adverse Change. A material adverse change occurs in Borrower’s financial condition, or Lender believes the prospect of payment or performance of the Loan is impaired. 
  
 Insecurity. Lender in good faith believes itself insecure.

  
 Right to Cure. If any default, other than a default on
Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured (and no Event of Default will have occurred) if Borrower or Grantor,
as the case may be, after receiving written notice from Lender demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which Lender deems in
Lender’s sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical. 
  
 EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments and obligations of Lender under this Agreement or the Related Documents or any other agreement immediately will terminate (including any obligation to make further Loan
Advances or disbursements), and, at Lender’s option, all Indebtedness immediately will become due and payable, all without notice of any kind to Borrower, except that in the case of an Event of Default of the type described in the
“Insolvency” subsection above, such acceleration shall be automatic and not optional. In addition. Lender shall have all the rights and remedies provided in the Related Documents or available at law, in equity, or otherwise. Except as may
be prohibited by applicable law, all of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to
make expenditures or to take action to perform an obligation of Borrower or of any Grantor shall not affect Lender’s right to declare a default and to exercise its rights and remedies. 
  
 CROSS-COLLATERALIZED/CROSS-DEFAULTED. This loan shall be cross-collateralized and
cross-defaulted with Loan #57224. A default on either of the loans to borrower, shall constitute a default on all loans. 
  
 MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Agreement: 
  
 Amendments. This Agreement, together with any Related Documents, constitutes the entire understanding and agreement
of the parties as to the matters set forth in this Agreement. No alteration of or amendment to this Agreement shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment.

  
 Attorneys’ Fees; Expenses. Borrower agrees to pay
upon demand all of Lender’s costs and expenses, including Lender’s reasonable attorneys’ fees and Lender’s legal expenses, incurred in connection with the enforcement of this Agreement. Lender may hire or pay someone else to help
enforce this Agreement, and Borrower shall pay the costs and expenses of such enforcement. Costs and expenses include Lender’s reasonable attorneys’ fees and legal expenses whether or not there is a lawsuit, including reasonable
attorneys’ fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. Borrower also shall pay all court costs and
such additional fees as may be directed by the court. 
  
 Caption Headings. Caption headings in this Agreement are for convenience purposes only and are not to be used to interpret or define the provisions of this Agreement. 
  
 Consent to Loan Participation. Borrower agrees and consents to Lender’s sale or transfer, whether now or later,
of one or more participation interests in the Loan to one or more purchasers, whether related or unrelated to Lender. Lender may provide, without any limitation whatsoever, to any one or more purchasers, or potential purchasers, any information or
knowledge Lender may have about Borrower or about any other matter relating to the Loan, and Borrower hereby waives any rights to privacy Borrower may have with respect to such matters. Borrower additionally waives any and all notices of sale of
participation interests, as well as all notices of any repurchase of such participation interests. Borrower also agrees that the purchasers of any such participation interests will be considered as the absolute owners of such interests in the Loan
and will have all the rights granted under the participation agreement or agreements governing the sale of such participation interests. Borrower further waives all rights of offset or counterclaim that it may have now or later against Lender or
against any purchaser of such a participation interest and unconditionally agrees that either Lender or such purchaser may enforce Borrower’s obligation under the Loan irrespective of the failure or insolvency of any holder of any interest in
the Loan. Borrower further agrees that the purchaser of any such participation interests may enforce its interests irrespective of any personal claims or defenses that Borrower may have against Lender. 
  
 Governing Law. This Agreement will be governed by, construed and enforced
in accordance with federal law and the laws of the State of Florida. This Agreement has been accepted by Lender in the State of Florida. 
  
 Choice of Venue. If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the jurisdiction of the courts of Pinellas County,
State of Florida. 
  
 No Waiver by Lender. Lender shall
not be deemed to have waived any rights under this Agreement unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any 

  

					
	BUSINESS LOAN AGREEMENT (ASSET BASED)
	Loan No: 71736	  	(Continued)	  	Page 5

  

 
other right. A waiver by Lender of a provision of this Agreement shall not prejudice or constitute a waiver of Lender’s right otherwise to demand strict
compliance with that provision or any other provision of this Agreement. No prior waiver by Lender, nor any course of dealing between Lender and Borrower, or between Lender and any Grantor, shall constitute a waiver of any of Lender’s rights or
of any of Borrower’s or any Grantor’s obligations as to any future transactions. Whenever the consent of Lender is required under this Agreement, the granting of such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. 
  
 Notices. Any notice required to be given under this Agreement shall be given in writing, and shall be effective when actually delivered, when
actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Agreement. Any party may change its address for notices under this Agreement by giving written notice to the other parties, specifying that the purpose of the notice is to change
the party’s address. For notice purposes, Borrower agrees to keep Lender informed at all times of Borrower's current address. Unless otherwise provided or required by law, if there is more than one Borrower, any notice given by Lender to any
Borrower is deemed to be notice given to all Borrowers. 
  
 Severability. If a court of competent jurisdiction finds any provision of this Agreement to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or
unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so that it becomes legal, valid and enforceable. If the offending provision cannot be so modified, it shall be considered deleted from this
Agreement. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Agreement shall not affect the legality, validity or enforceability of any other provision of this Agreement. 
  
 Subsidiaries and Affiliates of Borrower. To the extent the context of
any provisions of this Agreement makes it appropriate, including without limitation any representation, warranty or covenant, the word “Borrower” as used in this Agreement shall include all of Borrower’s subsidiaries and affiliates.
Notwithstanding the foregoing however, under no circumstances shall this Agreement be construed to require Lender to make any Loan or other financial accommodation to any of Borrower’s subsidiaries or affiliates. 
  
 Successors and Assigns. All covenants and agreements by or on behalf
of Borrower contained in this Agreement or any Related Documents shall bind Borrower’s successors and assigns and shall inure to the benefit of Lender and its successors and assigns. Borrower shall not, however, have the right to assign
Borrower’s rights under this Agreement or any interest therein, without the prior written consent of Lender. 
  
 Survival of Representations and Warranties. Borrower understands and agrees that in extending Loan Advances, Lender is relying on all
representations, warranties, and covenants made by Borrower in this Agreement or in any certificate or other instrument delivered by Borrower to Lender under this Agreement or the Related Documents. Borrower further agrees that regardless of any
investigation made by Lender, all such representations, warranties and covenants will survive the extension of Loan Advances and delivery to Lender of the Related Documents, shall be continuing in nature, shall be deemed made and redated by Borrower
at the time each Loan Advance is made, and shall remain in full force and effect until such time as Borrower’s Indebtedness shall be paid in full, or until this Agreement shall be terminated in the manner provided above, whichever is the last
to occur. 
  
 Time is of the Essence. Time is of the
essence in the performance of this Agreement. 
  
 Waive Jury.
All parties to this Agreement hereby waive the right to any jury trial in any action, proceeding, or counterclaim brought by any party against any other party. 
  
 DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Agreement. Unless
specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as
the context may require. Words and terms not otherwise defined in this Agreement shall have the meanings attributed to such terms in the Uniform Commercial Code. Accounting words and terms not otherwise defined in this Agreement shall have the
meanings assigned to them in accordance with generally accepted accounting principles as in effect on the date of this Agreement: 
  
 Account. The word “Account” means a trade account, account receivable, other receivable, or other right to payment for goods sold or
services rendered owing to Borrower (or to a third party grantor acceptable to Lender). 
  
 Advance. The word “Advance” means a disbursement of Loan funds made, or to be made, to Borrower or on Borrower’s behalf under the terms and conditions of this Agreement. 
  
 Agreement. The word “Agreement” means this Business Loan
Agreement (Asset Based), as this Business Loan Agreement (Asset Based) may be amended or modified from time to time, together with all exhibits and schedules attached to this Business Loan Agreement (Asset Based) from time to time. 
  
 Borrower. The word “Borrower” means VERTICAL HEALTH
SOLUTIONS INC and includes all co-signers and co-makers signing the Note. 
  
 Borrowing Base. The words “Borrowing Base” mean, as determined by Lender from time to time, the lesser of (1) $500,000.00 or (2) the sum of (a) 70.000% of the
aggregate amount of Eligible Accounts, plus (b) 50.000% of the aggregate amount of Eligible Inventory. 
  
 Business Day. The words “Business Day” mean a day on which commercial banks are open in the State of Florida. 
  
 Collateral. The word “Collateral” means all property and
assets granted as collateral security for a Loan, whether real or personal property, whether granted directly or indirectly, whether granted now or in the future, and whether granted in the form of a security interest, mortgage, collateral mortgage,
deed of trust, assignment, pledge, crop pledge, chattel mortgage, collateral chattel mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien, charge, lien or title retention contract, lease or consignment
intended as a security device, or any other security or lien interest whatsoever, whether created by law, contract, or otherwise. The word Collateral also includes without limitation all collateral described in the Collateral section of this
Agreement. 
  
 Eligible Accounts. The words “Eligible
Accounts” mean at any time, all of Borrower’s Accounts which contain selling terms and conditions acceptable to Lender. The net amount of any Eligible Account against which Borrower may borrow shall exclude all returns, discounts, credits,
and offsets of any nature. Unless otherwise agreed to by Lender in writing. Eligible Accounts do not include: 
  
 (1) Accounts with respect to which the Account Debtor is employee or agent of Borrower. 
  
 (2) Accounts with respect to which the Account Debtor is a subsidiary of, or affiliated with Borrower or its shareholders,
officers, or directors. 
  
 (3) Accounts with respect to which
goods are placed on consignment, guaranteed sale, or other terms by reason of which the payment by the Account Debtor may be conditional. 
  
 (4) Accounts with respect to which Borrower is or may become liable to the Account Debtor for goods sold or services rendered by the Account Debtor to
Borrower. 
  
 (5) Accounts which are subject to dispute,
counterclaim, or setoff. 
  
 (6) Accounts with respect to which
the goods have not been shipped or delivered, or the services have not been rendered, to the Account Debtor. 
  
 (7) Accounts with respect to which Lender, in its sole discretion, deems the creditworthiness or financial condition of the Account Debtor to be
unsatisfactory. 
  
 (8) Accounts of any Account Debtor who has
filed or has had filed against it a petition in bankruptcy or an application for relief under any provision of any state or federal bankruptcy, insolvency, or debtor-in-relief acts; or who has had appointed a trustee, custodian, or receiver for the
assets of such Account Debtor; or who has made an assignment for the benefit of creditors or has become insolvent or fails generally to pay its debts (including its payrolls) as such debts become due. 
  
 (9) Accounts which have not been paid in full within 60 DAYS from the
invoice date. 
  
 Eligible Inventory. The words
“Eligible Inventory” mean at any time, all of Borrower’s Inventory as defined below except: 
  
 (1) Inventory which is not owned by Borrower free and clear of all security interests, liens, encumbrances, and claims of third parties. 
  
 (2) Inventory which Lender, in its sole discretion, deems to be obsolete,
unsalable, damaged, defective, or unfit for further processing. 
  
 (3) Inventory and finished goods stored off premises. 
  
 Environmental Laws. The words “Environmental Laws” mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation
the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”), the Superfund Amendments and 

  

					
	BUSINESS LOAN AGREEMENT (ASSET BASED)
	Loan No: 71736	  	(Continued)	  	Page 6

  

 
Reauthorization Act of 1986, Pub. L. No. 99-499 (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. 
  
 Event of Default. The words “Event of Default” mean any of the events of default set forth in this Agreement in the default section of
this Agreement. 
  
 Expiration Date. The words
“Expiration Date” mean the date of termination of Lender’s commitment to lend under this Agreement. GAAP. The word “GAAP” means generally accepted accounting principles. 
  
 Grantor. The word “Grantor” means each and all of the
persons or entities granting a Security Interest in any Collateral for the Loan, including without limitation all Borrowers granting such a Security Interest. 
  

Guarantor. The word “Guarantor” means any guarantor, surety, or accommodation party of any or all of the Loan. 
  
 Guaranty. The word “Guaranty” means the guaranty from
Guarantor to Lender, including without limitation a guaranty of all or part of the Note. 
  
 Hazardous Substances. The words “Hazardous Substances” mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a
present or potential hazard to human health or the environment when improperly used, treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words “Hazardous Substances” are used in their very broadest
sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term “Hazardous Substances” also includes, without limitation, petroleum and
petroleum by-products or any fraction thereof and asbestos. 
  
 Indebtedness. The word “Indebtedness” means the indebtedness evidenced by the Note or Related Documents, including all principal and interest together with all other indebtedness and costs and expenses for which Borrower is
responsible under this Agreement or under any of the Related Documents. 
  
 Inventory. The word “Inventory” means all of Borrower’s raw materials, work in process, finished goods, merchandise, parts and supplies, of every kind and description, and goods held for sale or
lease or furnished under contracts of service in which Borrower now has or hereafter acquires any right, whether held by Borrower or others, and all documents of title, warehouse receipts, bills of lading, and all other documents of every type
covering all or any part of the foregoing. Inventory includes inventory temporarily out of Borrower’s custody or possession and all returns on Accounts. 
  

Lender. The word “Lender” means First Community Bank of America, its successors and assigns. 
  
 Loan. The word “Loan” means any and all loans and financial
accommodations from Lender to Borrower whether now or hereafter existing, and however evidenced, including without limitation those loans and financial accommodations described herein or described on any exhibit or schedule attached to this
Agreement from time to time. 
  
 Note. The word
“Note” means the Note executed by VERTICAL HEALTH SOLUTIONS INC in the principal amount of $500,000.00 dated April 16, 2004, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and
substitutions for the note or credit agreement. 
  
 Primary
Credit Facility. The words “Primary Credit Facility” mean the credit facility described in the Line of Credit section of this Agreement. 
  
 Related Documents. The words “Related Documents” mean all promissory notes, credit agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Loan. 
  
 Security Agreement. The words “Security Agreement” mean and
include without limitation any agreements, promises, covenants, arrangements, understandings or other agreements, whether created by law, contract, or otherwise, evidencing, governing, representing, or creating a Security Interest. 
  
 Security Interest. The words “Security Interest” mean,
without limitation, any and all types of collateral security, present and future, whether in the form of a lien, charge, encumbrance, mortgage, deed of trust, security deed, assignment, pledge, crop pledge, chattel mortgage, collateral chattel
mortgage, chattel trust, factor’s lien, equipment trust, conditional sale, trust receipt, lien or title retention contract, lease or consignment intended as a security device, or any other security or lien interest whatsoever whether created by
law, contract, or otherwise. 
  
 BORROWER ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS BUSINESS LOAN AGREEMENT (ASSET BASED) AND BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT (ASSET BASED) IS DATED APRIL 16, 2004. 
  
 BORROWER: 
  

									
	VERTICAL HEALTH SOLUTIONS INC	 	 	 	 
					
	By:	 	 	 	 	 	By:	 	 
	 	 	
	 	 	 	 	 	

	 	 	BRIAN NUGENT, PRESIDENT of VERTICAL HEALTH SOLUTIONS INC	 	 	 	 	 	STEPHEN WATTERS, CEO of VERTICAL HEALTH SOLUTIONS INC

  

			
	LENDER:
	
	FIRST COMMUNITY BANK OF AMERICA
		
	By:	 	 
	 	 	

	 	 	Authorized Signer

  

 LASER PRO Lending, Ver. 5.23.20.002 Copr. Harland Financial Solutions, Inc. 1997, 2004. All Rights Reserved. - FL l:\CFI\LPL\C40.FC TR-2917 PR-9Revolving Loan Agreement, dated April 25, 2001.

 EXHIBIT 10.4 
  
 REVOLVING LOAN AGREEMENT 
  
 THIS REVOLVING LOAN AGREEMENT (“Agreement”) is made as of this 25th day of April, 2001, by and between RANCON REALTY FUND IV, a California limited partnership
(“Borrower”), and MID-PENINSULA BANK, a California Banking Corporation (“Lender”). 
  
 1. DEFINITIONS OF TERMS USED IN THIS AGREEMENT. 
  
 1.1 Advance. A disbursement under the Loan to Borrower pursuant to the term hereof. 
  
 1.2 Borrower’s Interest Rate. The rate of interest to be paid to Lender in respect to the Loan as set forth in the
Note. 
  
 1.3 Collateral Pool. The parcels of the Property
described and defined in Paragraph 2.3 hereof. 
  
 1.4 Default
Interest. That rate of interest specified in the Note which shall be in effect in the event of default hereunder or under the Note. 
  
 1.5 Environmental Indemnity. The unsecured environmental indemnity agreement executed in favor of Lender of even date herewith. 
  
 1.6 Governmental Authority. The authority of the United States, the State of
California, any political subdivision thereof, any city and any governmental or quasigovernmental agency, department, commission, board, bureau or instrumentality of any of them, or any court, administrative tribunal, or public utility. 

 
 1.7 Governmental Requirements. Any present or future law, ordinance,
order, rule or regulation of a Governmental Authority applicable to Borrower or the construction, maintenance, use, operation or sale of the Property. 
  
 1.8 Loan. The amount evidenced by the Note, i.e., in the maximum amount of Seven Million Two Hundred Thousand and No/ 100ths Dollars ($7,200,000.00).

  
 1.9 Loan Fee. The loan fee to be paid to Lender in
consideration for Lender agreeing to make the Loan and entering into this Agreement, which fee shall not be subject to reduction or be refundable under any circumstances, and which fee is the sum of Seventy-Two Thousand and No/ 100ths Dollars
($72,000.00), payable upon Recordation. 
  
 1.10 Maturity Date.
The date upon which the indebtedness evidenced by the Note shall be due and payable in full, being the date of April 15, 2004. 
  
 1.11 Note. The Promissory Note Secured by Deed of Trust (Revolving Credit Facility) of even date herewith executed by Borrower as maker and payable to
Lender or order, in the principal amount of the Loan, evidencing Advances of a revolving nature which will be made, repaid and remade from time to time. 

 1.12 Property. Those certain parcels of real property now and hereafter legally described in the Trust
Deed and in Paragraph 2.3 hereof. 
  
 1.13 Recordation. The act of
recording the Trust Deed in the official records of the Counties in which the parcels constituting the Collateral Pool are situated. 
  
 1.14 Title Insurer. The issuer of a lender’s title insurance policy to Lender, i.e., Chicago Title Insurance Company. 
  
 1.15 Trust Deed. The deed of trust in favor of Lender of even date herewith
encumbering the Property and given to secure the Note. 
  
 2.
LOAN. 
  
 2.1 Loan. Borrower has requested and Lender has agreed
to provide to Borrower a revolving line of credit in the maximum amount of Seven Million Two Hundred Thousand and No/100ths Dollars ($7.200,000.00). From time to time during the term of the Loan, at such times as Borrower is not in default hereunder
or under the Note or Trust Deed, Lender shall make Advances to Borrower for any purpose, in the form of deposits to Borrower’s account or such other account as selected by Borrower, but in no event shall the sum of all cash Advances outstanding
at any time exceed the lesser of. (a) the “Borrowing Base” (as defined hereinafter); or (b) Seven Million Two Hundred Thousand and No/100ths Dollars ($7,200,000.00). 
  
 2.2 Advances. The date and amount of each Advance made by Lender and of each repayment of principal thereon received by
Lender shall be recorded by Lender in its records. The aggregate unpaid principal amount so recorded by Lender shall constitute prima facie evidence of the principal amount owing and unpaid on the Note, provided, however, that the failure by Lender
to record any such amount or any error in so recording any such amount shall not limit or otherwise affect the obligations of the Borrower under this Agreement or the Note to repay the principal amount of the Loan together with all interest accrued
or accruing thereon. 
  

 2 

 2.3 Borrowing; Base. The Trust Deed shall encumber in a first lien position the following parcels of
property having the noted appraised values as of the date hereof (“Appraised Value”) (said parcels, less any parcels released from the Trust Deed from time to time, are collectively called the Collateral Pool): 
  

				
	 LOCATION

	  	APPRAISED
VALUE

	 1. 674 Brier Drive,
 San Bernardino, California (“IRC Property”)
	  	$	6,200,00.00
		
	 2. 390 East Hospitality Way
 San Bernardino, California (“TGI Property”)
	  	$	1,850,000.00
		
	 3. 555 East Hospitality Way
 San Bernardino, California (“CC Property”)
	  	$	5,400,000.00
		
	 TOTAL:
	  	$	13,450,000.00

  
 2.3.1 The maximum
outstanding principal balance of the Loan shall not exceed at any time the lesser of fifty-four percent (54%) of the appraised value of the Collateral Pool (“Borrowing Base”) or Seven Million Two Hundred Thousand and No/100ths Dollars
($7,200,000.00). Accordingly, the Borrowing Base as of the date hereof is Seven Million Two Hundred Thousand and No/100ths Dollars ($7,200,000.00.00). 
  
 2.3.2 Provided Borrower is not in default under the Loan, Borrower may remove parcels from the Collateral Pool and thereby revise the Borrowing Base
downward, as follows: 
  
 (a) Release. Provided Borrower is not
in default hereunder, Borrower shall be entitled to request that Lender release the lien of the Trust Deed from one or more parcels of the Collateral Pool upon either payment of a cash release price and/or a reduction in the Borrowing Base in an
amount equal to the portion of the then Borrowing Base allocable to said parcel or parcels to be released which is required to be paid in order to reduce the outstanding principal balance of the Loan to the new, reduced Borrowing Base required
amount, thereby decreasing the Borrowing Base in either case. The allocable portion of the Borrowing Base shall be $2,915,000.00 for the CC Property, $1,000,000.00 for the TGI Property and $3,350,000.00 for the IRC Property. At the time of the
release of the IRC Property, the real property described as Parcel IV in the Trust Deed shall be released for no consideration. 
  
 (b) Example 1: At the time of the release, the outstanding principal balance of the Loan is $7,200,000.00 and the property to be released is the CC
Property. The Borrowing Base is reduced to fifty-four percent (54%) of the Appraised Value of the remaining Collateral (TGI Property and the IRC Property) ($8,050,000.00), being the amount of $4,347,000.00, resulting in a required cash release price
payment of $2,853,000.00 to be applied to the principal balance of the Loan. 
  

 3 

 Example 2: Same facts as in Example 1, except that the outstanding principal balance of the Loan at the
time of the release is $4,000,000.00. No cash release price is due since the Loan balance is less than the new Borrowing Base of $4,347,000.00. 
  
 2.4 Written and Telephone Notice Authorizations. Unless and until Borrower delivers to Lender written notice to the contrary, Borrower shall request
Advances either in writing or by facsimile (510-351-8828) or by telephone (510-346-7338). If requested by Lender, within three (3) days after a telephonic or facsimile authorization, Borrower shall deliver to Lender a written confirmation of such
telephonic authorization. Borrower understands that it shall be fully responsible for any and all Advances outstanding under the Note which are made in reliance on telephone calls, and that Borrower’s failure to send a written confirmation will
not negate the previous telephonic request. 
  
 2.5 Loan. Lender
and Borrower agree that Lender shall make the Loan to Borrower and Borrower shall accept the Loan upon the terms, conditions, covenants, representations and warranties contained herein. All Advances disbursed hereunder shall be evidenced by the Note
and all Advances shall bear interest from the date of the Advance until paid at the rate of Borrower’s Interest or Default Interest, as the case may be, and shall be secured by the Trust Deed. 
  
 3. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants, which representations and warranties shall survive any investigations, inspections or inquiries made by Lender or any of its representatives or the disbursement of Loan proceeds hereunder, that: 
  
 3.1 Financial Statements. The financial statements heretofore delivered to
Lender are true and correct in all respects, fairly present the respective financial conditions of the subjects thereof as of their respective dates; no materially adverse change has occurred in the financial conditions reflected therein since their
respective dates and no additional borrowings have been made by Borrower since the date thereof other than the borrowing contemplated hereby or approved by Lender. 
  
 3.2 Litigation. There are no actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or
affecting it, or the Property, or involving the validity or enforceability of the Trust Deed or the priority of the lien thereof, at law or in equity, or before or by any Governmental Authority. 
  
 3.3 No Breach. The consummation of the transaction hereby contemplated and
performance of this Agreement, the Note and Trust Deed will not result in any breach of, or constitute a default under any mortgage, deed of trust, lease, bank loan or security agreement, corporate charter, by laws or other instrument to which the
Borrower is a party or by which it may be bound or affected. 
  
 3.4 Other Liens. Borrower has made no contract or arrangement of any kind, the performance of which by the other party thereto would give rise to a lien on the Property or any portion thereof. 
  

 4 

 3.5 No Default. There is no default on the part of Borrower under this Agreement, the Note or the Trust
Deed, and no event has occurred and is continuing which with notice or the passage of time or either would constitute a default under any term or provision thereof. 
  
 3.6 Accuracy. All documents, reports, instruments, papers, information and forms of evidence delivered to Lender by Borrower
with respect to the Loan are accurate and correct, are complete insofar as completeness may be necessary to give Lender true and accurate knowledge of the subject matter thereof, and do not contain any misrepresentations or omissions. Lender may
rely on such documents, reports, instruments, papers, information and forms of evidence without investigation or inquiry, and any payment made by Lender in reliance thereon shall be a complete release in its favor of all sums so paid. 
  
 4. BORROWER’S COVENANTS. Borrower covenants and agrees until the full
and final payment of the Loan, unless Lender waives compliance in writing, that it will: 
  
 4.1 Title Insurance. Deliver or cause to be delivered to Lender at Recordation a 1992 ALTA Lender’s Policy Title Insurance or its equivalent with liability limit equal to $’7,200,000.00, issued by Title
Insurer, insuring Lender’s interest under the Trust Deed as a valid first lien on the Property, together with a CLTA 111.11 revolving loan endorsement and such other endorsements to said policy as Lender may require. Said policy shall contain
only such exceptions from its coverage as shall have been approved in writing by Lender. 
  
 4.2 Financial Information. Furnish to Lender at least annually, by March 31 of each year, copies of Borrower’s full and complete financial statement concerning income, expenses, assets, and liabilities applicable
or attributable to the Property and the operations thereof, together with rent rolls for the Property. Such statement shall be and shall be certified as true, complete and correct by Borrower. Borrower shall also furnish to Lender within fifteen
(15) days of filing copies of Borrower’s federal and State tax returns and I OK reports for Rancon Financial Corporation. 
  
 4.3 Taxes. Pay and discharge all lawful claims, including taxes, assessments, and governmental charges or levies imposed upon it or its income or profits
or upon any properties belonging to it prior to the date upon which penalties attach thereto; provided that Borrower shall not be required to pay any such tax, assessment, charge, or levy, the payment of which is being contested in good faith and by
proper proceedings. 
  
 4.4 Notification of Default. Promptly
notify Lender in writing of the occurrence of any event of default under this Agreement, the Note or the Trust Deed or of any facts then in existence which would become an event of default hereunder or there under upon the giving of notice or the
lapse of time or both. 
  
 4.5 Payment of Costs. Pay all costs and
expenses required to satisfy the conditions of this Agreement. Without limitation of the generality for the foregoing, Borrower will pay: 
  
 4.5.1 all taxes and recording expenses, including stamp taxes, if any; and 
  

 5 

 4.5.2 the fees of Lender’s counsel in connection with the negotiation and preparation of this
Agreement and the Loan Documents, Lender’s Loan Fee, appraisal fee, environmental inspection fee, title insurance premium and any and all other costs incurred by Lender in connection with the Loan. 
  
 4.6 No Conveyance or Encumbrance. Not to sell, convey, transfer, dispose of
or further encumber the Property or any part thereof or any interest therein or enter into a lease covering all or any portion thereof or an undivided interest therein, either voluntarily, involuntarily or otherwise, or enter into an agreement so to
do without the prior written consent of Lender being first had and obtained. All easements, declarations of covenants, conditions and restrictions, and private or public dedications affecting the Property shall be submitted to Lender for its
approval and such approval shall be obtained prior to the execution or granting of any thereof by Borrower, accompanied by a drawing or survey showing the precise location of each thereof. 
  
 4.7 Furnishing Notices. Borrower shall promptly furnish Lender with copies,
or notify Lender in writing, of the following: 
  
 4.7.1 any
communication, whether written or oral, that Borrower may receive from any governmental, judicial or legal authority, giving notice of any claim or assertion that the Property fails in any respect to comply with any Governmental Requirements, or of
any dispute which may exist between Borrower and any governmental, judicial or legal authority that may adversely affect Borrower, or the Property; 
  
 4.7.2 any material adverse change in Borrower’s financial condition or operations or in the physical condition of the Property; 
  
 4.7.3 any filings (with true copies thereof) with any Governmental Authority
regarding or pursuant to any law related to Hazardous Materials (as defined in the Trust Deed) or the environment; 
  
 4.7.4 any proceeding or inquiry by any Governmental Authority (including, without limitation, the California State Department of Health Services) with
respect to the presence of any Hazardous Materials on the Property or the migration thereof from or to other property; 
  
 4.7.5 all claims made or threatened by any third party against Borrower or the Property relating to any loss or injury resulting from any Hazardous
Materials; 
  
 4.7.6 Borrower’s discovery of any occurrence
or condition on any real property adjoining or in the vicinity of the Property or any part thereof to be subject to any restriction on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Laws; or

  
 4.7.7 any proposed or contemplated change in the organization
or management of Borrower or in the nature of its business. 
  

 6 

 4.8 Debt Coverage Ratio. Borrower shall, at all times, maintain a Debt Coverage Ratio, as hereinafter
defined, of at least 1.25 to 1.00 for the IRC Property and for the CC Property and of at least 1.50 to 1.00 for the TGI Property. For the purposes hereof, the term “Debt Coverage Ratio” shall be defined as a debt coverage ratio, calculated
by dividing (i) the Net Operating Income, as hereinafter defined, generated by rents from tenants in occupancy under leases of the parcels constituting the Property paying rent for a specified period of time, taking into account any vacancy factor
deemed appropriate by Lender, by (ii) the debt service (i.e., principal and interest payments) that would be payable on a loan in an amount equal to the Borrowing Base of the parcel of the Property in question if the debt service was calculated on
the basis of a twenty-five (25) year amortization period and a per annum interest rate equal to the Borrower’s Interest Rate in effect on the date of determination. For the purposes hereof, the term “Net Operating Income” shall be
defined as any and all gross rents and expense reimbursements collected from tenants under leases of the parcels constituting the Property for a specified period of time less all bona fide normal, customary and reasonable operating expenses actually
paid during such period and less applicable management costs and reasonable reserves, as determined by Lender. The date(s) of determination shall be on or about April 15, 2001 and each anniversary thereof during the term of the Loan based upon the
financial data for the Property furnished by Borrower to Lender for the immediately preceding twelve (12) month period. 
  
 5. DEFAULT. At the option of Lender, the following shall constitute events of default hereunder (including, if Borrower consists of more than one person,
the occurrence of any of such events with respect to any one or more of said persons): 
  
 5.1 Any default in the performance of any covenant, condition or agreement set forth herein, in the Trust Deed, Note or other documents evidencing or securing the Loan. 
  
 5.2 Borrower voluntarily suspends the transaction of business or there is an
attachment, execution or other judicial seizure of any portion of Borrower’s assets and such seizure is not discharged within ten (10) days. 
  
 5.3 Borrower becomes insolvent or unable to pay its debts as they mature or makes an assignment for the benefit of creditors. 
  
 5.4 Borrower files or there is filed against Borrower a petition to have
Borrower adjudicated a bankrupt or a petition of reorganization or arrangement under any law relating to bankruptcy unless, in the case of a petition filed against Borrower, the same is dismissed within ten (10) days. 
  
 5.5 Borrower applies for or consents to the appointment of a receiver,
trustee or conservator for any portion of Borrower’s property or such appointment is made without Borrower’s consent and is not vacated within ten (10) days. 
  
 5.6 Any representation by Borrower to Lender concerning Borrower’s financial condition or credit standing or any
representation or warranty contained herein proves to be false or misleading. 
  

 7 

 5.7 The imposition, voluntary or involuntary, of any lien or encumbrance upon the Property without
Lender’s written consent or unless an adequate counter bond is provided and such lien is accordingly released within ten (10) days of the imposition of such lien. 
  
 5.8 The amendment of any lease of the Property or any amendment of Borrower’s partnership agreement made without
Lender’s prior written consent. 
  
 6. REMEDIES. If any of
the events of default set forth in Paragraph 5 occur, then Lender, in addition to its other rights hereunder, may at its option, without prior demand or notice. 
  
 6.1 Declare the Note and all Advances thereunder immediately due and payable and cease making Advances under the Loan.

  
 6.2 Proceed as authorized by law to satisfy the indebtedness
of Borrower to Lender and in that regard, Lender shall be entitled to all of the rights, privileges and benefits contained in the Trust Deed or other Loan documents. 
  
 7. GENERAL CONDITIONS. 
  
 7.1 No Waiver. No delay or omission of Lender in exercising any right or power arising from any default by Borrower shall be construed as a waiver of such
default or as an acquiescence therein, nor shall any single or partial exercise thereof preclude any further exercise thereof. Lender may, at its option, waive any of the conditions herein and any such waiver shall not be deemed a waiver of
Lender’s rights hereunder but shall be deemed to have been made in pursuance of this Agreement and not in modification thereof. No waiver of any event of default shall be construed to be a waiver of or acquiescence in or consent to any
preceding or subsequent event of default. 
  
 7.2 No Third Party
Benefits. This Agreement is made for the sole benefit of Borrower and Lender, their successors and assigns and no other person or persons shall have any rights or remedies under or by reason of this Agreement nor shall Lender owe any duty whatsoever
to any claimant to exercise any right or power of Lender hereunder or arising from any default by Borrower. 
  
 7.3 Notice. All notices or demands of any kind which either party may be required or desire to serve upon the other under the terms of this Agreement
shall be in writing and shall be given by personal delivery, national overnight courier, or by certified or registered United States mail, postage prepaid. Notices addressed to Lender shall be sent to Lender at 420 Cowper Street, Palo Alto,
California 94301, and notices addressed to Borrower shall be sent to the address set forth below its signature. Notices shall be effective upon receipt or when proper delivery is refused. In case of service by mail, notices shall be deemed complete
at the expiration of the second day after the date of mailing. Either party may change its address for purposes of notice by giving notice of such change of address to the other party in accordance with the provisions of this paragraph. 

 

 8 

 7.4 Entire Agreement. This Agreement, the other documents evidencing or securing the Loan constitute the
entire understanding between the parties regarding the matters mentioned in or incidental to this Agreement. The Loan documents supersede all oral negotiations and prior writings concerning the subject matter of the Loan documents. This Agreement
may not be modified, amended or terminated except by a written agreement signed by each of the parties hereto. 
  
 7.5 Documentation. In addition to the instruments and documents mentioned or referred to herein, Borrower will, at its own cost and expense, supply Lender
with such other instruments, documents, information and data as may, in Lender’s opinion, be reasonably necessary for the purposes hereof, all of which shall be in form and content acceptable to Lender. 
  
 7.6 Borrower Information. Borrower agrees that Lender may provide any
financial or other information, data or material in Lender’s possession relating to Borrower, the Loan, this Agreement or the Property, to Lender’s parent, affiliate, subsidiary, participants or service providers, without further notice to
Borrower. 
  
 7.7 Not Assignable. Neither this Agreement nor any
right of Borrower to receive any sums, proceeds or disbursements hereunder, or under the Note may be assigned, pledged, hypothecated, anticipated or otherwise encumbered by Borrower without the prior written consent of Lender. Subject to the
foregoing restrictions, this Agreement shall inure to the benefit of Lender, its successors and assigns and bind Borrower, its heirs, executors, administrators, successors and assigns. 
  
 7.8 Time is of the Essence. Time is hereby declared to be of the essence of this Agreement and of every part hereof.

  
 7.9 Supplement to Loan_ Documents. The provisions of this
Agreement are not intended to supersede the provisions of the Trust Deed or any other document evidencing or securing the Loan but shall be construed as supplemental thereto. 
  
 7.10 Governing Law. This Agreement (and any and all disputes between the parties arising directly or indirectly from the
transaction or from the lending relationship contemplated hereunder) shall be governed by and construed in accordance with the laws of the State of California. 
  

7.11 Governmental Regulations. If payment of the indebtedness secured by the Trust Deed is to be insured or guaranteed by any governmental agency,
Borrower shall comply with all rules, regulations, requirements and statutes relating thereto or provided in any commitment issued by any such agency to insure or guarantee payment of such indebtedness. 
  
 7.12 Collection Costs. Borrower shall pay promptly to Lender without demand,
with interest thereon from date of expenditure at the Default Interest rate, reasonable attorneys’ fees and all costs and other expenses paid or incurred by Lender in enforcing or exercising its rights or remedies created by, connected with or
provided in this Agreement, and payment thereof shall be secured by the Trust Deed. 
  

 9 

 7.13 Survival. The representations, warranties and covenants herein shall survive the disbursement of the
Loan and shall remain in force and effect until the Loan is paid in full. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement the day and year first above written. 
  

							
	 LENDER:
	 	 BORROWER:

		
	 MID-PENINSULA BANK,
	 	 RANCON REALTY FUND IV, a

	 a California Banking Corporation
	 	 California limited partnership

				
	 By:
  
  
  
 Its:
	 	 /s/ Judy Paris

 Judy Paris
 Senior Vice-President
	 	 By:
	 	 Rancon Financial Corporation,
 a California corporation, a
 general partner

				
	 	 	 	 	 By:
	 	 /s/ Daniel Lee Stephenson

	 	 	 	 	 	 	 Daniel Lee Stephenson

	 	 	 	 	 	 	 Its President

				
	 	 	 	 	 By:
	 	 /s/ Daniel Lee Stephenson

	 	 	 	 	 	 	 Daniel Lee Stephenson,

	 	 	 	 	 	 	 A general partner

			
	 	 	 	 	 Address:

	 	 	 	 	 400 South El Camino Real, Ste. 1100

	 	 	 	 	 San Mateo, CA 94402

  

 10

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