Document:

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                                                                   EXHIBIT 10.1

                           LOAN AND SECURITY AGREEMENT
     HEALTH GRADES, INC., HEALTHCARE RATINGS, INC. AND PROVIDERWEB.NET, INC.

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                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                                Page
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<S>      <C>                                                                                                     <C>
1        ACCOUNTING AND OTHER TERMS...............................................................................4

2        LOAN AND TERMS OF PAYMENT................................................................................4
         2.1      Promise to Pay..................................................................................4
         2.2      Overadvances....................................................................................4
         2.3      Interest Rate, Payments.........................................................................5
         2.4      Fees............................................................................................5

3        CONDITIONS OF LOANS......................................................................................5
         3.1      Conditions Precedent to Initial Credit Extension................................................5
         3.2      Conditions Precedent to all Credit Extensions...................................................5

4        CREATION OF SECURITY INTEREST............................................................................5
         4.1      Grant of Security Interest......................................................................6
         4.2      Authorization of File...........................................................................6

5        REPRESENTATIONS AND WARRANTIES...........................................................................6
         5.1      Due Organization and Authorization..............................................................6
         5.2      Collateral......................................................................................6
         5.3      Litigation......................................................................................7
         5.4      No Material Adverse Change in Financial Statements..............................................7
         5.5      Solvency........................................................................................7
         5.6      Regulatory Compliance...........................................................................7
         5.7      Subsidiaries....................................................................................7
         5.8      Full Disclosure.................................................................................7

6        AFFIRMATIVE COVENANTS....................................................................................8
         6.1      Government Compliance...........................................................................8
         6.2      Financial Statements, Reports, Certificates.....................................................8
         6.3      Inventory; Returns..............................................................................8
         6.4      Taxes...........................................................................................9
         6.5      Insurance.......................................................................................9
         6.6      Primary Accounts................................................................................9
         6.7      Financial Covenants.............................................................................9
         6.8      Registration of Intellectual Property Rights....................................................9
         6.9      Further Assurances.............................................................................10

7        NEGATIVE COVENANTS......................................................................................10
         7.1      Dispositions...................................................................................10
         7.2      Changes in Business, Ownership, Management or Business Locations...............................10
         7.3      Mergers or Acquisitions........................................................................10
         7.4      Indebtedness...................................................................................10
         7.5      Encumbrance....................................................................................10
         7.6      Distributions; Investments.....................................................................11
         7.7      Transactions with Affiliates...................................................................11
         7.8      Subordinated Debt..............................................................................11
         7.9      Compliance.....................................................................................11

8        EVENTS OF DEFAULT.......................................................................................11
         8.1      Payment Default................................................................................11
         8.2      Covenant Default...............................................................................11
</Table>

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<Table>
<S>               <C>                                                                                            <C>
         8.3      Material Adverse Change........................................................................12
         8.4      Attachment.....................................................................................12
         8.5      Insolvency.....................................................................................12
         8.6      Other Agreements...............................................................................12
         8.7      Judgments......................................................................................12
         8.8      Misrepresentations.............................................................................12

9        BANK'S RIGHTS AND REMEDIES..............................................................................12
         9.1      Rights and Remedies............................................................................12
         9.2      Power of Attorney..............................................................................13
         9.3      Bank Expenses..................................................................................13
         9.4      Bank Liability for Collateral..................................................................14
         9.5      Remedies Cumulative............................................................................14
         9.6      Demand Waiver..................................................................................14

10       NOTICES AND WAIVERS.....................................................................................14
         10.1     Notices........................................................................................14
         10.2     Subrogation and Similar Rights.................................................................15
         10.3     Waivers of Notice..............................................................................15
         10.4     Subrogation Defenses...........................................................................15
         10.5     Right to Settle, Release.......................................................................15

11       CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER.............................................................16

12       GENERAL PROVISIONS......................................................................................16
         12.1     Successors and Assigns.........................................................................16
         12.2     Indemnification................................................................................16
         12.3     Time of Essence................................................................................16
         12.4     Severability of Provision......................................................................16
         12.5     Amendments in Writing, Integration.............................................................17
         12.6     Counterparts...................................................................................17
         12.7     Survival.......................................................................................17
         12.8     Confidentiality................................................................................17
         12.9     Attorneys' Fees, Cost and Expenses.............................................................17

13       DEFINITIONS.............................................................................................17
         13.1     Definitions....................................................................................17
</Table>

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         THIS LOAN AND SECURITY AGREEMENT dated May 10, 2002, between SILICON
VALLEY BANK ("Bank"), whose address is 3003 Tasman Drive, Santa Clara,
California 95054 with a loan production office located at 4410 Arapahoe Ave.,
Ste. 200, Boulder, Colorado 80303 and HEALTH GRADES, INC., HEALTHCARE RATINGS,
INC. and PROVIDERWEB.NET, INC. (jointly and severally, "Borrower") provides the
terms on which Bank will lend to Borrower and Borrower will repay Bank. The
parties agree as follows:

1        ACCOUNTING AND OTHER TERMS

         Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document.

2        LOAN AND TERMS OF PAYMENT

2.1      PROMISE TO PAY.

         Borrower promises to pay Bank the unpaid principal amount of all Credit
Extensions and interest on the unpaid principal amount of the Credit Extensions.

2.1.1    REVOLVING ADVANCES.

         (a) Bank will make Advances not exceeding (A) the lesser of the
Committed Revolving Line or the Borrowing Base minus (B) the Cash Management
Services Sublimit. Amounts borrowed under this Section may be repaid and
reborrowed during the term of this Agreement.

         (b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 12:00 p.m. Pacific time on the Business Day the Advance is to be
made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to
Borrower's deposit account. Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to such reliance.

         (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable.

2.1.2    CASH MANAGEMENT SERVICES SUBLIMIT.

         Borrower may use up to $200,000 for Bank's Cash Management Services,
which may include merchant services, direct deposit of payroll, business credit
card, and check cashing services identified in various cash management services
agreements related to such services (the "Cash Management Services"). All
amounts Bank pays for any Cash Management Services will be treated as Advances
under the Committed Revolving Line.

2.2      OVERADVANCES.

         If Borrower's Obligations under Section 2.1.1 and 2.1.2 exceed the
lesser of either the Committed Revolving Line or the Borrowing Base, Borrower
must immediately pay Bank the excess.

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2.3      INTEREST RATE, PAYMENTS.

         (a) Interest Rate. Advances accrue interest on the outstanding
principal balance at a per annum rate of 0.75 of 1 percentage point above the
Prime Rate. Upon the occurrence and continuation of an Event of Default,
Obligations accrue interest at 5 percent above the rate effective immediately
before the Event of Default. The interest rate increases or decreases when the
Prime Rate changes. Interest is computed on a 360 day year for the actual number
of days elapsed.

         (b) Payments. Interest due on the Committed Revolving Line is payable
on the 9th of each month. Bank may debit any of Borrower's deposit accounts
including Account Number ______________ for principal and interest payments
owing or any amounts Borrower owes Bank. Bank will promptly notify Borrower when
it debits Borrower's accounts. These debits are not a set-off. Payments received
after 12:00 noon Pacific time are considered received at the opening of business
on the next Business Day. When a payment is due on a day that is not a Business
Day, the payment is due the next Business Day and additional interest shall
accrue.

2.4      FEES.

         Borrower will pay:

         (a) Facility Fee. A fully earned, non-refundable Facility Fee of $5,000
due on the Closing Date;

         (b) Bank Expenses. All Bank Expenses (including reasonable attorneys'
fees and reasonable expenses) incurred through and after the date of this
Agreement, are payable when due; and

         (c) Early Termination Fee. A fully earned, non-refundable early
termination fee of $5,000 shall be due upon voluntary or involuntary payment in
full of the Obligations and termination of the Committed Revolving Line unless
the Obligations are paid in full via initial advance from a loan agreement
entered into with Bank.

3        CONDITIONS OF LOANS

3.1      CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION.

         Bank's obligation to make the initial Credit Extension is subject to
the condition precedent that it receive the agreements, documents and fees it
requires.

3.2      CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.

         Bank's obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following:

         (a) timely receipt of any Payment/Advance Form; and

         (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each
Credit Extension and no Event of Default may have occurred and be continuing, or
result from the Credit Extension. Each Credit Extension is Borrower's
representation and warranty on that date that the representations and warranties
of Section 5 remain materially true.

4        CREATION OF SECURITY INTEREST

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4.1      GRANT OF SECURITY INTEREST.

         Borrower grants Bank a continuing security interest in all presently
existing and later acquired Collateral to secure all Obligations and performance
of each of Borrower's duties under the Loan Documents. Except for Permitted
Liens, any security interest will be a first priority security interest in the
Collateral. Upon the occurrence and continuation of an Event of Default, Bank
may place a "hold" on any deposit account pledged as Collateral. If this
Agreement is terminated, Bank's lien and security interest in the Collateral
will continue until Borrower fully satisfies its Obligations.

4.2      AUTHORIZATION OF FILE.

         Borrower authorizes Bank to file financing statements without notice to
Borrower, with all appropriate jurisdictions, as Bank deems appropriate, in
order to perfect or protect Bank's interest in the Collateral.

5        REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants as follows:

5.1      DUE ORGANIZATION AND AUTHORIZATION.

         Borrower and each Subsidiary is duly existing and in good standing in
its state of formation and qualified and licensed to do business in, and in good
standing in, any state in which the conduct of its business or its ownership of
property requires that it be qualified, except where the failure to do so could
not reasonably be expected to cause a Material Adverse Change. Borrower has not
changed its state of formation or its organizational structure or type or any
organizational number (if any) assigned by its jurisdiction of formation.

         The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower is
bound. Borrower is not in default under any agreement to which or by which it is
bound in which the default could reasonably be expected to cause a Material
Adverse Change.

5.2      COLLATERAL.

         Borrower has good title to the Collateral, free of Liens except
Permitted Liens or Borrower has Rights to each asset that is Collateral.
Borrower has no other deposit account, other than the deposit accounts described
in the Schedule. The Accounts are bona fide, existing obligations, and the
service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. The Collateral is not in the possession of any third party bailee (such
as at a warehouse). In the event that Borrower, after the date hereof, intends
to store or otherwise deliver the Collateral to such a bailee, then Borrower
will receive the prior written consent of Bank and such bailee must acknowledge
in writing that the bailee is holding such Collateral for the benefit of Bank.
Borrower has no notice of any actual or imminent Insolvency Proceeding of any
account debtor whose accounts are an Eligible Account in any Borrowing Base
Certificate. All Inventory is in all material respects of good and marketable
quality, free from material defects. Borrower is the sole owner of the
Intellectual Property, except for non-exclusive licenses granted to its
customers in the ordinary course of business. Each Patent is valid and
enforceable and no part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party, except to the
extent such claim could not reasonably be expected to cause a Material Adverse
Change.

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5.3      LITIGATION.

         Except as shown in the Schedule, there are no actions or proceedings
pending or, to the knowledge of Borrower's Responsible Officers and legal
counsel, threatened by or against Borrower or any Subsidiary in which a likely
adverse decision could reasonably be expected to cause a Material Adverse
Change.

5.4      NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS.

         All consolidated financial statements for Borrower, and any Subsidiary,
delivered to Bank fairly present in all material respects Borrower's
consolidated financial condition and Borrower's consolidated results of
operations. There has not been any Material Adverse Change in Borrower's
consolidated financial condition since the date of the most recent financial
statements submitted to Bank.

5.5      SOLVENCY.

         The fair salable value of Borrower's assets (including goodwill minus
disposition costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
mature.

5.6      REGULATORY COMPLIANCE.

         Borrower is not an "investment company" or a company "controlled" by an
"investment company" under the Investment Company Act. Borrower is not engaged
as one of its important activities in extending credit for margin stock (under
Regulations T and U of the Federal Reserve Board of Governors). Borrower has
complied in all material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules, the violation of which
could reasonably be expected to cause a Material Adverse Change. None of
Borrower's or any Subsidiary's properties or assets has been used by Borrower or
any Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP.
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted, except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.

5.7      INVESTMENTS IN SUBSIDIARIES.

         Borrower does not own any stock, partnership interest or other equity
securities except for Permitted Investments.

5.8      FULL DISCLOSURE.

         No written representation, warranty or other statement of Borrower in
any certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading. It
being recognized by Bank that the projections and forecasts provided by Borrower
in good faith and based upon reasonable assumptions are not viewed as facts and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected and forecasted results.

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6        AFFIRMATIVE COVENANTS

         Borrower will do all of the following for so long as Bank has an
obligation to lend, or there are outstanding Obligations:

6.1      GOVERNMENT COMPLIANCE.

         Borrower will maintain its and all Subsidiaries' legal existence and
good standing in its jurisdiction of formation and maintain qualification in
each jurisdiction in which the failure to so qualify would reasonably be
expected to cause a Material Adverse Change in Borrower's consolidated business
or operations. Borrower will comply, and have each Subsidiary comply, with all
laws, ordinances and regulations to which it is subject, noncompliance with
which could have a material adverse effect on Borrower's business or operations
or would reasonably be expected to cause a Material Adverse Change.

6.2      FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

         (a) Borrower will deliver to Bank: (i) as soon as available, but no
later than 30 days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower's consolidated
operations during the period certified by a Responsible Officer and in a form
acceptable to Bank; (ii) as soon as available, but no later than 90 days after
the last day of Borrower's fiscal year, audited consolidated financial
statements prepared under GAAP, consistently applied, together with an
unqualified opinion on the financial statements from an independent certified
public accounting firm reasonably acceptable to Bank; (iii) within 5 days of
filing, copies of all statements, reports and notices made available to
Borrower's security holders or to any holders of Subordinated Debt and all
reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission; (iv) a prompt report of any legal actions pending or threatened
against Borrower or any Subsidiary that reasonably likely could result in
damages or costs to Borrower or any Subsidiary of $100,000 or more; (v) budgets,
sales projections, operating plans or other financial information Bank
reasonably requests; and (vi) prompt notice of any material change in the
composition of the Intellectual Property, including any subsequent ownership
right of Borrower in or to any Copyright, Patent or Trademark not shown in any
intellectual property security agreement between Borrower and Bank or knowledge
of an event that materially adversely affects the value of the Intellectual
Property.

         (b) Within 20 days (or 30 days if no outstanding Advances exist and
prior to an Advance if no outstanding Advances exist) after the last day of each
month, Borrower will deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in the form of Exhibit C, with aged listings of accounts
receivable and accounts payable.

         (c) Within 30 days after the last day of each month, Borrower will
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.

         (d) Allow Bank to audit Borrower's Collateral at Borrower's expense.
Such audits will be conducted no more often than every year unless an Event of
Default has occurred and is continuing.

6.3      INVENTORY; RETURNS.

         Borrower will keep all Inventory in good and marketable condition, free
from material defects. Returns and allowances between Borrower and its account
debtors will follow Borrower's customary practices as they exist at execution of
this Agreement. Borrower must promptly notify Bank of all returns, recoveries,
disputes and claims, that involve more than $50,000.

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6.4      TAXES.

         Borrower will make, and cause each Subsidiary to make, timely payment
of all material federal, state, and local taxes or assessments and will deliver
to Bank, on demand, appropriate certificates attesting to the payment.

6.5      INSURANCE.

         Borrower will keep its business and the Collateral insured for risks
and in amounts, as Bank may reasonably request. Insurance policies will be in a
form, with companies, and in amounts that are satisfactory to Bank in Bank's
reasonable discretion. All property policies will have a lender's loss payable
endorsement showing Bank as an additional loss payee and all liability policies
will show the Bank as an additional insured and provide that the insurer must
give Bank at least 20 days notice before canceling its policy. At Bank's
request, Borrower will deliver certified copies of policies and evidence of all
premium payments. Upon the occurrence and continuation of an Event of Default,
proceeds payable under any policy will, at Bank's option, be payable to Bank on
account of the Obligations.

6.6      PRIMARY ACCOUNTS.

         Borrower will maintain its primary banking relationship with Bank,
which relationship shall include Borrower maintaining account balances in any
accounts at or through Bank representing at least 50% of all account balances of
Borrower at any financial institution.

6.7      FINANCIAL COVENANTS.

         Borrower will maintain as of the last day of each month:

                  (i) QUICK RATIO (ADJUSTED). A ratio of Borrower's cash
maintained with Bank plus Eligible Accounts to Current Liabilities minus
Deferred License and Maintenance Revenue related to licenses and Physician
Practice Management, of at least 1.50 to 1.00.

                  (ii) TANGIBLE NET WORTH. A book net worth, less intangibles,
plus non-offsetable Deferred License and Maintenance Revenue of at least the sum
of $1,400,000 plus 25% of new equity or fiscal quarter Profitability. For
calculation purposes, "Profitability" is defined as pre-tax earnings.

6.8      REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS.

         Borrower will register with the United States Patent and Trademark
Office or the United States Copyright Office its Intellectual Property which a
majority of the Responsible Officers deem, in good faith, appropriate for the
development of Borrower's business within 30 days of the date of acquiring or
creating such intellectual property, and additional Intellectual Property rights
developed or acquired including revisions or additions with any product before
the sale or licensing of the product to any third party.

         Borrower will (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property and promptly advise Bank in writing
of material infringements and (ii) not allow any Intellectual Property to be
abandoned, forfeited or dedicated to the public without Bank's written consent.

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6.9      FURTHER ASSURANCES.

         Borrower will execute any further instruments and take further action
as Bank reasonably requests to perfect or continue Bank's security interest in
the Collateral or to effect the purposes of this Agreement.

7        NEGATIVE COVENANTS

         Borrower will not do any of the following without Bank's prior written
consent, which will not be unreasonably withheld, for so long as Bank has an
obligation to lend and there are any outstanding Obligations:

7.1      DISPOSITIONS.

         Convey, sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or any part of
its business or property, except for Transfers (i) of Inventory in the ordinary
course of business; (ii) of non-exclusive licenses and similar arrangements for
the use of the property of Borrower or its Subsidiaries in the ordinary course
of business; or (iii) of worn-out or obsolete Equipment.

7.2      CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR LOCATIONS OF COLLATERAL.

         Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower or reasonably related
thereto or have a material change in its ownership or management of greater than
25% (other than (i) by the sale of Borrower's equity securities in a public
offering or (ii) to venture capital investors so long as Borrower identifies the
venture capital investors prior to the closing of the investment, or (iii) the
sale of equity securities owned, as of the Closing Date, by Chancellor V, LP or
Essex Woodlands Health Ventures). Borrower will not, without at least 30 days
prior written notice, relocate its chief executive office, change its state of
formation (including reincorporation), change its organizational number or name
or add any new offices or business locations (such as warehouses) in which
Borrower maintains or stores over $5,000 in Collateral.

7.3      MERGERS OR ACQUISITIONS.

         Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except where (i) no Event of Default has occurred
and is continuing or would result from such action during the term of this
Agreement and (ii) such transaction would not result in a decrease of more than
25% of Tangible Net Worth. A Subsidiary may merge or consolidate into another
Subsidiary or into Borrower.

7.4      INDEBTEDNESS.

         Create, incur, assume, or be liable for any Indebtedness, or permit any
Subsidiary to do so, other than Permitted Indebtedness.

7.5      ENCUMBRANCE.

         Create, incur, or allow any Lien on any of its property, or assign or
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries to do so, except for Permitted Liens, or permit
any Collateral not to be subject to the first priority security interest granted
here, subject to Permitted Liens.

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7.6      DISTRIBUTIONS; INVESTMENTS.

         Directly or indirectly acquire or own any Person, or make any
Investment in any Person, other than Permitted Investments, or permit any of its
Subsidiaries to do so. Pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock, except for repurchases of stock
from former employees or directors of Borrower under the terms of applicable
repurchase agreements in an aggregate amount not to exceed $100,000 in the
aggregate in any fiscal year, provided that no Event of Default has occurred, is
continuing or would exist after giving effect to the repurchases.

7.7      TRANSACTIONS WITH AFFILIATES.

         Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower except for transactions that are in
the ordinary course of Borrower's business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm's length
transaction with a nonaffiliated Person.

7.8      SUBORDINATED DEBT.

         Make or permit any payment on any Subordinated Debt, except under the
terms of the Subordinated Debt, or amend any provision in any document relating
to the Subordinated Debt without Bank's prior written consent.

7.9      COMPLIANCE.

         Become an "investment company" or a company controlled by an
"investment company," under the Investment Company Act of 1940 or undertake as
one of its important activities extending credit to purchase or carry margin
stock, or use the proceeds of any Credit Extension for that purpose; fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if the
violation could reasonably be expected to have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do so.

8        EVENTS OF DEFAULT

         Any one of the following is an Event of Default:

8.1      PAYMENT DEFAULT.

         If Borrower fails to pay any of the Obligations within 3 days after
their due date, however, during such period no Credit Extensions will be made;

8.2      COVENANT DEFAULT.

         (a) If Borrower fails to perform any obligation under Sections 6.2 or
6.7 or violates any of the covenants contained in Article 7 of this Agreement,
or

         (b) If Borrower fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant, or agreement contained in
this Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Bank and as to any default under such other term,
provision, condition, covenant or agreement that can be cured, has failed to
cure such default within ten (10) days after the occurrence thereof; provided,
however, that if the default cannot by its nature be cured within the ten (10)
day period or cannot

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after diligent attempts by Borrower be cured within such ten (10) day period,
and such default is likely to be cured within a reasonable time, then Borrower
shall have an additional reasonable period (which shall not in any case exceed
thirty (30) days) to attempt to cure such default, and within such reasonable
time period the failure to have cured such default shall not be deemed an Event
of Default (provided that no Credit Extensions will be made during such cure
period);

8.3      MATERIAL ADVERSE CHANGE.

         If there (i) occurs a material adverse change in the business,
operations, or financial condition of the Borrower, or (ii) is a material
impairment of the prospect of repayment of any portion of the Obligations; or
(iii) is a material impairment of the value or priority of Bank's security
interests in the Collateral (the foregoing being defined as a "Material Adverse
Change").

8.4      ATTACHMENT.

         If any material portion of Borrower's assets is attached, seized,
levied on, or comes into possession of a trustee or receiver and the attachment,
seizure or levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material part of its
business or if a judgment or other claim becomes a Lien on a material portion of
Borrower's assets, or if a notice of lien, levy, or assessment is filed against
any of Borrower's assets by any government agency and not paid within 10 days
after Borrower receives notice. These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Credit Extensions will be
made during the cure period);

8.5      INSOLVENCY.

         If Borrower becomes insolvent or if Borrower begins an Insolvency
Proceeding or an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within 30 days (but no Credit Extensions will be made before
any Insolvency Proceeding is dismissed);

8.6      OTHER AGREEMENTS.

         If there is a default in any agreement between Borrower and a third
party that gives the third party the right to accelerate any Indebtedness
exceeding $100,000 or that could cause a Material Adverse Change;

8.7      JUDGMENTS.

         If a money judgment(s) in the aggregate of at least $50,000 is rendered
against Borrower and is unsatisfied and unstayed for 10 days (but no Credit
Extensions will be made before the judgment is stayed or satisfied); or

8.8      MISREPRESENTATIONS.

         If Borrower or any Person acting for Borrower makes any material
misrepresentation or material misstatement now or later in any warranty or
representation in this Agreement or in any writing delivered to Bank or to
induce Bank to enter this Agreement or any Loan Document.

9        BANK'S RIGHTS AND REMEDIES

9.1      RIGHTS AND REMEDIES.

         When an Event of Default occurs and continues Bank may, without notice
or demand, do any or all of the following:

                                       12
<PAGE>

         (a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);

         (b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;

         (c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable; notify any
Person owing Borrower money of Bank's security interest in the funds and verify
the amount of the Account. Borrower must collect all payments in trust for Bank
and, if requested by Bank, immediately deliver the payments to Bank in the form
received from the account debtor, with proper endorsements for deposit;

         (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requires and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;

         (e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;

         (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and

         (g) Dispose of the Collateral according to the Code.

9.2      POWER OF ATTORNEY.

         Effective only when an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name
on any checks or other forms of payment or security; (ii) sign Borrower's name
on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower's insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits. Bank may exercise the power of attorney to sign Borrower's name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank's obligation to provide Credit Extensions
terminates.

9.3      BANK EXPENSES.

         If Borrower fails to pay any amount or furnish any required proof of
payment to third persons, Bank may make all or part of the payment or obtain
insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then

                                       13
<PAGE>

applicable rate and secured by the Collateral. No payments by Bank are deemed an
agreement to make similar payments in the future or Bank's waiver of any Event
of Default.

9.4      BANK'S LIABILITY FOR COLLATERAL.

         If Bank complies with reasonable banking practices and Section 9-207 of
the Code, it is not liable for: (a) the safekeeping of the Collateral; (b) any
loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other person. Except as provided above, Borrower bears all risk of loss, damage
or destruction of the Collateral.

9.5      REMEDIES CUMULATIVE.

         Bank's rights and remedies under this Agreement, the Loan Documents,
and all other agreements are cumulative. Bank has all rights and remedies
provided under the Code, by law, or in equity. Bank's exercise of one right or
remedy is not an election, and Bank's waiver of any Event of Default is not a
continuing waiver. Bank's delay is not a waiver, election, or acquiescence. No
waiver is effective unless signed by Bank and then is only effective for the
specific instance and purpose for which it was given.

9.6      DEMAND WAIVER.

         Borrower waives demand, notice of default or dishonor, notice of
payment and nonpayment, notice of any default, nonpayment at maturity, release,
compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

10       NOTICES AND WAIVERS

10.1     NOTICES.

         Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
delivery service, certified mail, postage prepaid, return receipt requested, or
by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:

         If to Borrower      Health Grades, Inc.
                             44 Union Boulevard, Suite 600
                             Lakewood, CO 80228
                             Attn: ____________________
                             FAX: __________

         and to              HealthCare Ratings, Inc.
                             44 Union Boulevard, Suite 600
                             Lakewood, CO 80228
                             Attn: ____________________
                             FAX: __________

         and to              ProviderWeb.net, Inc.
                             44 Union Boulevard, Suite 600
                             Lakewood, CO 80228
                             Attn: ____________________
                             FAX: __________

                                       14
<PAGE>

         If to Bank          Silicon Valley Bank
                             4410 Arapahoe Ave., Ste. 200
                             Boulder, CO 80303
                             Attn: Kevin Grossman
                             FAX: __________

10.2     SUBROGATION AND SIMILAR RIGHTS.

         Notwithstanding any other provision of this Agreement or any other Loan
Document, each Borrower irrevocably waives all rights that it may have at law or
in equity (including, without limitation, any law subrogating the Borrower to
the rights of Bank under the Loan Documents) to seek contribution,
indemnification, or any other form of reimbursement from any other Borrower, or
any other Person now or hereafter primarily or secondarily liable for any of the
Obligations, for any payment made by the Borrower with respect to the
Obligations in connection with the Loan Documents or otherwise and all rights
that it might have to benefit from, or to participate in, any security for the
Obligations as a result of any payment made by the Borrower with respect to the
Obligations in connection with the Loan Documents or otherwise. Any agreement
providing for indemnification, reimbursement or any other arrangement prohibited
under this Section 10.2 shall be null and void. If any payment is made to a
Borrower in contravention of this Section 10.2, such Borrower shall hold such
payment in trust for Bank and such payment shall be promptly delivered to Bank
for application to the Obligations, whether matured or unmatured.

10.3     WAIVERS OF NOTICE.

         Each Borrower waives notice of acceptance hereof; notice of the
existence, creation or acquisition of any of the Obligations; notice of an Event
of Default; notice of the amount of the Obligations outstanding at any time;
notice of intent to accelerate; notice of acceleration; notice of any adverse
change in the financial condition of any other Borrower or of any other fact
that might increase the Borrower's risk; presentment for payment; demand;
protest and notice thereof as to any instrument; default; and all other notices
and demands to which the Borrower would otherwise be entitled. Each Borrower
waives any defense arising from any defense of any other Borrower, or by reason
of the cessation from any cause whatsoever of the liability of any other
Borrower. Bank's failure at any time to require strict performance by any
Borrower of any provision of the Loan Documents shall not waive, alter or
diminish any right of Bank thereafter to demand strict compliance and
performance therewith. Nothing contained herein shall prevent Bank from
foreclosing on the Lien of any deed of trust, mortgage or other security
instrument, or exercising any rights available thereunder, and the exercise of
any such rights shall not constitute a legal or equitable discharge of any
Borrower. Each Borrower also waives any defense arising from any act or omission
of Bank that changes the scope of the Borrower's risks hereunder. Each Borrower
hereby waives any right to assert against Bank any defense (legal or equitable),
setoff, counterclaim, or claims that such Borrower individually may now or
hereafter have against another Borrower or any other Person liable to Borrower
with respect to the Obligations in any manner or whatsoever.

10.4     SUBROGATION DEFENSES.

         Each Borrower waives the benefits, if any, of any statutory or common
law rule that may permit a borrower to assert any defenses of a surety or
guarantor, or that may give a borrower the right to require a senior creditor to
marshal assets, and Borrower agrees that it shall not assert any such defenses
or rights.

10.5     RIGHT TO SETTLE, RELEASE.

(a) The liability of each Borrower hereunder shall not be diminished by (i) any
agreement, understanding or representation that any of the Obligations is or was
to be guaranteed by another Person or secured by other property, or (ii) any
release or

                                       15
<PAGE>

unenforceability, whether partial or total, or rights, if any, which Borrower
may now or hereafter have against any other Person, including another Borrower,
or property with respect to any of the Obligations.

         (b) Without notice to any Borrower and without affecting the liability
of any Borrower hereunder, Bank may (i) compromise, settle, renew, extend the
time for payment, change the manner or terms of payment, discharge the
performance of, decline to enforce, or release all or any of the Obligations
with respect to a Borrower, (ii) grant other indulgences to a Borrower in
respect of the Obligations, (iii) modify in any manner any documents, relating
to the Obligations with respect to a Borrower, (iv) release, surrender or
exchange any deposits or other property securing the Obligations, whether
pledged by a Borrower or any other Person, or (v) compromise, settle renew, or
extend the time for payment, discharge the performance of, decline to enforce,
or release all or any obligations of any guarantor, endorser or other Person who
is now or may hereafter be liable with respect to any of the Obligations.

11       CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER

         Colorado law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Boulder County, Colorado.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY CONTEMPLATED
TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS
WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.
EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. initial here
                                                                   ------

12       GENERAL PROVISIONS

12.1     SUCCESSORS AND ASSIGNS.

         This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any
rights under it without Bank's prior written consent which may be granted or
withheld in Bank's discretion. Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank's obligations, rights and benefits
under this Agreement.

12.2     INDEMNIFICATION.

         Borrower will indemnify, defend and hold harmless Bank and its
officers, employees, and agents against: (a) all obligations, demands, claims,
and liabilities asserted by any other party in connection with the transactions
contemplated by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

12.3     TIME OF ESSENCE.

         Time is of the essence for the performance of all obligations in this
Agreement.

12.4     SEVERABILITY OF PROVISION.

         Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision.

                                       16
<PAGE>

12.5     AMENDMENTS IN WRITING, INTEGRATION.

         All amendments to this Agreement must be in writing and signed by
Borrower and Bank. This Agreement represents the entire agreement about this
subject matter, and supersedes prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement merge into this
Agreement and the Loan Documents.

12.6     COUNTERPARTS.

         This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and
delivered, are an original, and all taken together, constitute one Agreement.

12.7     SURVIVAL.

         All covenants, representations and warranties made in this Agreement
continue in full force while any Obligations remain outstanding. The obligations
of Borrower in Section 12.2 to indemnify Bank will survive until all statutes of
limitations for actions that may be brought against Bank have run.

12.8     CONFIDENTIALITY.

         In handling any confidential information, Bank will exercise the same
degree of care that it exercises for its own proprietary information, but
disclosure of information may be made (i) to Bank's subsidiaries or affiliates
in connection with their business with Borrower, (ii) to prospective transferees
or purchasers of any interest in the loans (provided, however, Bank shall use
commercially reasonable efforts in obtaining such prospective transferee or
purchasers agreement of the terms of this provision), (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with Bank's
examination or audit and (v) as Bank considers appropriate exercising remedies
under this Agreement. Confidential information does not include information that
either: (a) is in the public domain or in Bank's possession when disclosed to
Bank, or becomes part of the public domain after disclosure to Bank; or (b) is
disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.

12.9     ATTORNEYS' FEES, COSTS AND EXPENSES.

         In any action or proceeding between Borrower and Bank arising out of
the Loan Documents, the prevailing party will be entitled to recover its
reasonable attorneys' fees and other reasonable costs and expenses incurred, in
addition to any other relief to which it may be entitled.

13       DEFINITIONS

13.1     DEFINITIONS.

         In this Agreement:

         "ACCOUNTS" are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing, as such definition may be amended from time to time according to the
Code.

         "ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Committed Revolving Line.

                                       17
<PAGE>

         "AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

         "BANK EXPENSES" are all audit fees and expenses and reasonable costs
and expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

         "BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

         "BORROWING BASE" is the sum of (i) 75% of Eligible Accounts plus (ii)
50% of Borrower's cash invested through Bank's Investment Products Services
department, each as determined by Bank from Borrower's most recent Borrowing
Base Certificate; provided, however, that Bank may lower the percentage of the
Borrowing Base after performing an audit of Borrower's Collateral.

         "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.

         "CASH MANAGEMENT SERVICES" are defined in Section 2.1.2.

         "CLOSING DATE" is the date of this Agreement.

         "CODE" is the Colorado Uniform Commercial Code, as applicable.

         "COLLATERAL" is the property described on Exhibit A.

         "COMMITTED REVOLVING LINE" are Advances of up to $1,000,000 in the
aggregate.

         "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

         "COPYRIGHTS" are all copyright rights, applications or registrations
and like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

         "CREDIT EXTENSION" is each Advance or any other extension of credit by
Bank for Borrower's benefit.

         "CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.

                                       18
<PAGE>

         "DEFERRED LICENSE AND MAINTENANCE REVENUE" is all amounts received in
advance of performance under license and maintenance contracts and not yet
recognized as revenue.

         "ELIGIBLE ACCOUNTS" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in Section 5;
but Bank may change eligibility standards by giving Borrower notice. Unless Bank
agrees otherwise in writing, Eligible Accounts will not include:

         (a)  Accounts that the account debtor has not paid within 90 days of
         invoice date;

         (b) Accounts for an account debtor, 50% or more of whose Accounts have
         not been paid within 90 days of invoice date;

         (c)  Credit balances over 90 days from invoice date;

         (d) Accounts for an account debtor, including Affiliates, whose total
         obligations to Borrower exceed 25% of all Accounts, for the amounts
         that exceed that percentage, unless the Bank approves in writing;

         (e)  Accounts for which the account debtor does not have its principal
         place of business in the United States;

         (f)  Accounts for which the account debtor is a federal, state or local
         government entity or any department, agency, or instrumentality;

         (g) Accounts for which Borrower owes the account debtor, but only up to
         the amount owed (sometimes called "contra" accounts, accounts payable,
         customer deposits or credit accounts);

         (h) Accounts for demonstration or promotional equipment, or in which
         goods are consigned, sales guaranteed, sale or return, sale on
         approval, bill and hold, or other terms if account debtor's payment may
         be conditional;

         (i)  Accounts for which the account debtor is Borrower's Affiliate,
         officer, employee, or agent;

         (j) Accounts in which the account debtor disputes liability or makes
         any claim and Bank believes there may be a basis for dispute (but only
         up to the disputed or claimed amount), or if the Account Debtor is
         subject to an Insolvency Proceeding, or becomes insolvent, or goes out
         of business;

         (k)  Accounts for which Bank reasonably determines  collection to be
         doubtful.

         "EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

         "ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.

         "GAAP" is generally accepted accounting principles.

         "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

                                       19
<PAGE>

         "INSOLVENCY PROCEEDING" are proceedings by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

         "INTELLECTUAL PROPERTY" is all of Borrower's:

         (a) Copyrights, Trademarks, Patents, and Mask Works including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;

         (b) Any trade secrets and any intellectual property rights in computer
software and computer software products now or later existing, created, acquired
or held;

         (c) All design rights which may be available to Borrower now or later
created, acquired or held;

         (d) Any claims for damages (past, present or future) for infringement
of any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above;

         All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.

         "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

         "INVESTMENT" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

         "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

         "LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes
or guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

         "MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

         "MATERIAL ADVERSE CHANGE" is defined in Section 8.3.

         "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including cash management services,
letters of credit and foreign exchange contracts, if any and including interest
accruing after Insolvency Proceedings begin and debts, liabilities, or
obligations of Borrower assigned to Bank.

         "PATENTS" are patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same.

                                       20
<PAGE>

         "PERMITTED INDEBTEDNESS" is:

         (a) Borrower's indebtedness to Bank under this Agreement or any other
Loan Document;

         (b) Indebtedness existing on the Closing Date and shown on the
Schedule;

         (c)  Subordinated Debt;

         (d) Indebtedness to trade creditors incurred in the ordinary course of
business; and

         (e)  Indebtedness secured by Permitted Liens.

         "PERMITTED INVESTMENTS" are:

         (a) Investments shown on the Schedule and existing on the Closing Date;
and

         (b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue.

         "PERMITTED LIENS" are:

         (a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

         (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank's security interests;

         (c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;

         (d) Licenses or sublicenses granted in the ordinary course of
Borrower's business and any interest or title of a licensor or under any license
or sublicense, if the licenses and sublicenses permit granting Bank a security
interest;

         (e) Leases or subleases granted in the ordinary course of Borrower's
business, including in connection with Borrower's leased premises or leased
property;

         (f) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

         "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company association, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
firm, joint stock company, estate, entity or government agency.

         "PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

                                       21
<PAGE>

         "QUICK ASSETS" is, on any date, the Borrower's consolidated,
unrestricted cash, cash equivalents, net billed accounts receivable and
investments with maturities of fewer than 12 months determined according to
GAAP.

         "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Vice President of Finance of
Borrower.

         "REVOLVING MATURITY DATE" is May 9, 2003.

         "RIGHTS", as applied to the Collateral, means the Borrower's rights and
interests in, and powers with respect to, that Collateral, whatever the nature
of those rights, interests and powers and, in any event, including Borrower's
power to transfer rights in such Collateral to Bank.

         "SCHEDULE" is any attached schedule of exceptions.

         "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's indebtedness owed to Bank and which is reflected in a written
agreement in a manner and form acceptable to Bank and approved by Bank in
writing.

         "SUBSIDIARY" is for any Person, or any other business entity of which
more than 50% of the voting stock or other equity interests is owned or
controlled, directly or indirectly, by the Person or one or more Affiliates of
the Person.

         "TANGIBLE NET WORTH" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities.

         "TOTAL LIABILITIES" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

         "TRADEMARKS" are trademark and servicemark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

BORROWER:

Health Grades, Inc.

By:
    -------------------------------------------------

Title:
       ----------------------------------------------

HealthCare Ratings, Inc.

By:
    -------------------------------------------------

Title:
       ----------------------------------------------

                                       22
<PAGE>

ProviderWeb.net, Inc.

By:
    -------------------------------------------------

Title:
       ----------------------------------------------

BANK:

SILICON VALLEY BANK

By:
    -------------------------------------------------

Title:
       -------------------------------------

                                       23Exh 10.1-6/30/02 10Q

EXHIBIT 10.1

May 29, 2002

Attention: Hugh Regan

inTEST Corporation

inTEST Sunnyvale Corporation

Temptronic Corp.

inTEST Investments, Inc.

inTEST Licensing Corp.

inTEST IP Corp.

Seven Esterbrook Lane

Cherry Hill, NJ 08003

Re:$5,000,000 Committed Line of Credit

Dear Hugh:

We are pleased to inform you that PNC Bank, National Association (the "Bank") has reapproved your request for the renewal and restatement of the committed line of credit extended to inTEST Corporation ("InTEST"), inTEST Sunnyvale Corporation, Temptronic Corporation, inTEST Investments, Inc., inTEST IP Corp. and inTEST Licensing Corp. (each, a "Borrower" and collectively, the "Borrowers"). This letter agreement (this "Letter Agreement") amends, restates and replaces (but does not constitute a novation of or affect the status of any liens or security interests granted pursuant to) the existing Letter Agreement, dated November 16, 2000, by and among the Bank and the Borrowers (the "Existing Letter Agreement"). We look forward to this opportunity to help you meet the financing needs of your business. All the details regarding your Line of Credit (as defined herein) are outlined in the following sections of this Letter Agreement.

	Facility and Use of Proceeds. This is a committed revolving line of credit under which the Borrowers may request, and the Bank, subject to the terms and conditions of this Letter Agreement, will make, advances ("Advances") to the Borrowers from time to time until the Expiration Date, in an amount in the aggregate at any time outstanding not to exceed $5,000,000 (the "Line of Credit" or the "Loan"). The "Expiration Date" means February 28, 2004, or such later date as may be designated by the Bank by written notice to the Borrowers. Advances under the Line of Credit will be used for working capital or other general business purposes of the Borrowers.

The Borrowers may request that the Bank, in lieu of cash advances, issue standby letters of credit (individually, a "Letter of Credit" and collectively, the "Letters of Credit") under the Line of Credit in an amount not to exceed $500,000 in the aggregate having expiration dates not to exceed one year (but in no event shall the expiration date of a Letter of Credit be later than the date one week prior to the Expiration Date). The availability of Advances under the Line of Credit shall be reduced by the face amount of each Letter of Credit issued and outstanding (whether or not drawn). Each payment by the Bank under a Letter of Credit shall, in the Bank's discretion, constitute an Advance of principal under the Line of Credit and shall be evidenced by the Note (as defined below). The Letters of Credit shall be governed by the terms of this Letter Agreement and by one or more reimbursement agreements, in form and content satisfactory to the Bank, executed by the Borrowers in favor of the Bank (collectively, the "Reimbursement Agreements"). Each request for the issuance of a Letter of Credit must be accompanied by the requesting Borrower's execution of an application on the Bank's standard forms (each, an "Application"), together with all supporting documentation. Each Letter of Credit will be issued in the Bank's sole discretion and in a form acceptable to the Bank. The Borrowers shall pay to Bank a Letter of Credit fee in an amount equal to 2.25% per annum of the face amount of each Letter of Credit, which fee shall be payable quarterly in arrears on the first day of each calendar quarter, together with such other customary fees, commissions and expenses therefor as shall be required by the Bank. This letter is not a pre-advice for the issuance of a Letter of Credit and is not irrevocable.

The availability of Advances and Letters of Credit under the Line of Credit will be subject to a borrowing base formula and other provisions as set forth in a Borrowing Base Rider dated on or about the date of this Letter Agreement among the Borrowers and the Bank, the terms of which are incorporated herein by reference (the "Borrowing Base Rider"). At no time shall the sum of outstanding Advances under the Line of Credit plus the face amount of any outstanding Letters of Credit (whether or not drawn) exceed the Borrowing Base (as defined in the Borrowing Base Rider). Pursuant to the Borrowing Base Rider, the Borrowers will be required to deliver periodic Borrowing Base Certificates, reporting on their accounts and inventory in accordance with defined eligibility standards, as a condition to Advances under the Line of Credit.

	Note. The obligation of the Borrower to repay advances under the Line of Credit shall be evidenced by an amended and restated promissory note (the "Note") in form and content satisfactory to the Bank.

This Letter Agreement, the Note, the Security Agreement (as defined below) and the other agreements and documents executed and/or delivered pursuant hereto, as each may be amended, modified, extended or renewed from time to time, will constitute the "Loan Documents." Capitalized terms not defined herein shall have the meaning ascribed to them in the Loan Documents.

	Interest Rate. Interest on the unpaid balance of the Line of Credit Advances will be charged at the rates, and be payable on the dates and times, set forth in the Note.

	Repayment. Subject to the terms and conditions of this Letter Agreement, the Borrowers may borrow, repay and reborrow under the Line of Credit until the Expiration Date, on which date the outstanding principal balance and any accrued but unpaid interest shall be due and payable. Interest will be due and payable as set forth in the Note, and will be computed on the basis of a year of 360 days and paid on the actual number of days that principal is outstanding. 

	Security. The Borrowers must cause, or have previously caused the following to be executed and delivered to the Bank, in form and content satisfactory to the Bank, as security for the Line of Credit:

	a security agreement (the "Security Agreement") granting the Bank a first priority perfected lien on each Borrower's existing and future assets and property, wherever located, as more fully described therein, excluding only the patents and trademarks of Borrowers. 

If all or any portion of the tangible collateral is located on property which is not owned by the Borrowers or which is subject to a mortgage in favor of another lender, the Borrowers will deliver to the Bank Landlord's or Mortgagee's Waivers, as applicable, acceptable in form and content to the Bank for each such location.

Hazard insurance must be maintained on all inventory and equipment securing the Line of Credit in such amounts and with such coverages as are acceptable to the Bank, containing a standard lender loss payable clause in favor of the Bank.

The Loan will be cross-collateralized and cross-defaulted with all other present and future Obligations (as defined in the Loan Documents) of the Borrowers to the Bank.

	Covenants. Unless compliance is waived in writing by the Bank, until payment and satisfaction in full of the Loan and termination of the commitment for the Line of Credit:

	The Borrowers will promptly submit to the Bank such information as the Bank may reasonably request relating to the Borrowers' affairs (including but not limited to annual Financial Statements (as hereinafter defined) and tax returns for the Borrowers) or any security for the Loan.

	No Borrowers will make or permit any change in its form of organization or the nature of its business as carried on as of the date of this Letter Agreement.

	InTest will not make or permits any change in its executive officers as set forth on Schedule 6(c) attached hereto.

	No Borrower will make or permit any change in its equity ownership, which results in greater than twenty-five percent (25%) equity ownership by any one person.

	The Borrowers will notify the Bank in writing of the occurrence of any Event of Default or an act or condition which, with the passage of time, the giving of notice or both, might become an Event of Default.

	The Borrowers will comply with the financial and other covenants included in Exhibit "A" hereto.

	Representations and Warranties. To induce the Bank to extend the Loan and upon the making of each Advance to the Borrowers or issuing any Letter of Credit under the Line of Credit, each Borrower represents and warrants as follows:

	The Borrowers' latest Financial Statements provided to the Bank are true, complete and accurate in all material respects and fairly present the financial condition, assets and liabilities, whether accrued, absolute, contingent or otherwise, and the results of the Borrowers' operations for the period specified therein. The Borrowers' Financial Statements have been prepared in accordance with generally accepted accounting principles consistently applied from period to period subject, in the case of interim statements, to normal year-end adjustments. Since the date of the latest Financial Statements provided to the Bank, the Borrowers have not suffered any damage, destruction or loss which has materially adversely affected their business, assets, operations, financial condition or results of operations.

	There are no actions, suits, proceedings or governmental investigations pending or, to the knowledge of the Borrowers, threatened against any Borrower which could result in a material adverse change in such Borrower's business, assets, operations, financial condition or results of operations, and there is no basis known to any Borrower or its officers, directors or shareholders for any such action, suit, proceedings or investigation.

	Each Borrower has filed all returns and reports that are required to be filed (subject to any extensions granted) by it in connection with any federal, state or local tax, duty or charge levied, assessed or imposed upon such Borrower or its property, including unemployment, social security and similar taxes, and all of such taxes have been either paid, except such taxes (other than real estate taxes which must be paid regardless of challenge), if any, as are being contested in good faith and as to which adequate reserves have been provided.

	Each Borrower is duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization and has the power and authority to own and operate its assets and to conduct its business as now or proposed to be carried on, and is duly qualified, licensed and in good standing to do business in all jurisdictions where its ownership of property or the nature of its business requires such qualification or licensing.

	Each Borrower has full power and authority to enter into the transactions provided for in this Letter Agreement and has been duly authorized to do so by all necessary and appropriate action and, when executed and delivered by such Borrower, this Letter Agreement and the other Loan Documents will constitute the legal, valid and binding obligations of such Borrower, enforceable against such Borrower in accordance with their terms.

	There does not exist any default or violation by any Borrower of or under any of the terms, conditions or obligations of: (i) its organizational documents; (ii) any indenture, mortgage, deed of trust, franchise, permit, contract, agreement, or other instrument to which it is a party or by which it is bound; or (iii) any law, regulation, ruling, order, injunction, decree, condition or other requirement applicable to or imposed upon the Borrower by any law or by any governmental authority, court or agency.

	Fees.

	On the date of the Note, the Borrowers shall pay to the Bank a fee of $17,500. 

	On the last day of each calendar quarter, until the Expiration Date, the Borrowers shall pay a commitment fee to the Bank, in arrears, at the rate of 0.425% per annum on the average daily balance of the Line of Credit which is undisbursed and uncancelled during the preceding calendar quarter. The commitment fee shall be computed on the basis of a year of 360 days and paid on the actual number of days elapsed.

	Expenses. The Borrowers will reimburse the Bank for the Bank's out-of-pocket expenses incurred or to be incurred at any time in conducting UCC, title and other public record searches, and in filing and recording documents in the public records to perfect the Bank's liens and security interests. The Borrowers shall also reimburse the Bank for the Bank's expenses (including the reasonable fees and expenses of the Bank's outside and in-house counsel) in documenting and closing this transaction, in connection with any amendments, modifications or renewals of the Loan, and in connection with the collection of all of the Borrowers' Obligations to the Bank, including but not limited to enforcement actions relating to the Loan.

	Depository. The Borrowers will establish and maintain at the Bank the Borrowers' primary depository accounts, with balances in the aggregate of at least $50,000.

	Additional Provisions. Before the first advance under the Loan and/or the issuance of any Letter of Credit, the Borrowers shall execute and deliver to the Bank the Note, an Application for each Letter of Credit, the Reimbursement Agreements, the Security Agreement and the other required Loan Documents and such other instruments and documents as the Bank may reasonably request, such as certified resolutions, incumbency certificates or other evidence of authority. The Bank will not be obligated to make any Advance or to issue any Letter of Credit under the Line of Credit if any Event of Default or event which with the passage of time, provision of notice or both would constitute an Event of Default, shall have occurred and be continuing.

Prior to execution of the final Loan Documents, the Bank may terminate this Letter Agreement if a material adverse change occurs with respect to any Borrower, any collateral for the Loan or any other person or entity connected in any way with the Loan, or if the Borrowers fail to comply with any of the terms and conditions of this Letter Agreement, or if the Bank reasonably determines that any of the conditions cannot be met.

This Letter Agreement is governed by the laws of New Jersey. No modification, amendment or waiver of any of the terms of this Letter Agreement, nor any consent to any departure by the Borrowers therefrom, will be effective unless made in a writing signed by the party to be charged, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. When accepted, this Letter Agreement and the other Loan Documents will constitute the entire agreement between the Bank and the Borrowers concerning the Line of Credit, and shall replace all prior understandings, statements, negotiations and written materials relating to the Line of Credit, including, without limitation, the Existing Letter Agreement.

The Borrowers agree to indemnify the Bank (and its directors, officers, employees, agents and controlling persons) against any and all claims, losses, damages, liabilities, costs and expenses (including, by way of example only, fees and expenses of counsel and expert witnesses) which may be incurred by any of them in connection with any investigation, litigation or other proceeding relating to the Loan, the Loan Documents and/ or the use of proceeds of the Loan, except those solely attributable to its or their own gross negligence or willful misconduct. The Borrowers' indemnification obligations are in addition to any other liability the Borrowers may otherwise have, and shall survive payment in full of the Loans, termination of this Letter Agreement and the other Loan Documents, and assignment of any rights hereunder.

The Bank will not be responsible for any damages, consequential, incidental, special, punitive or otherwise, that may be incurred or alleged by any person or entity, including the Borrowers, as a result of this Letter Agreement, the other Loan Documents, the transactions contemplated hereby or thereby, or the use of proceeds of the Loan.

THE BORROWERS AND THE BANK IRREVOCABLY WAIVE ANY AND ALL RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE ARISING OUT OF THIS LETTER AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED IN ANY OF SUCH DOCUMENTS AND ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

The Borrowers shall be jointly and severally liable for all Obligations arising under this Letter Agreement and the other Loan Documents.

If and when a loan closing occurs, this Letter Agreement (as the same may be amended from time to time) shall survive the closing and will serve as our loan agreement throughout the term of the Loan.

Thank you for giving PNC Bank this opportunity to work with your business. We look forward to other ways in which we may be of service to your business or to you personally.

Very truly yours,

PNC BANK, NATIONAL ASSOCIATION

By:  /s/ Gary Martz

Print Name: Gary Martz

Title: Assistant Vice President

ACCEPTANCE

With the intent to be legally bound hereby, the above terms and conditions are hereby agreed to and accepted as of this 29th day of May, 2002.

	
TEMPTRONIC CORPORATION

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer

	
INTEST CORPORATION 

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer

	
INTEST INVESTMENTS, INC.

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer
	
INTEST SUNNYVALE CORPORATION

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer

	
INTEST IP CORP.

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer
	
INTEST LICENSING CORP.

By:  /s/ Hugh T. Regan, Jr.

Print Name: Hugh T. Regan, Jr.

Title: Secretary and Treasurer

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT A

TO LETTER AGREEMENT

DATED MAY 29, 2002

	FINANCIAL REPORTING COVENANTS:

	The Borrowers will deliver to the Bank:

	Financial Statements for its fiscal year, within ninety (90) days after fiscal year end, audited and certified without qualification by a certified public accountant acceptable to the Bank.

	Financial Statements for each fiscal quarter, within forty-five (45) days after the fiscal quarter end, together with year-to-date and comparative figures for the corresponding periods of the prior year, certified as true and correct by InTEST's chief financial officer.

	With each delivery of Financial Statements, a certificate of InTEST's chief financial officer as to the Borrowers' compliance with the financial covenants set forth below, if any, for the period then ended and whether any Event of Default exists, and, if so, the nature thereof and the corrective measures the Borrowers propose to take. This certificate shall set forth all detailed calculations necessary to demonstrate such compliance.

	The Borrowers will deliver to the Bank within twenty-five (25) days following the close of each month, the Borrowers' detailed schedule of accounts receivable and accounts payable aging analysis and a report of the Borrowers' inventory, as established by a physical count or such other method as may be approved by the Bank.

	Promptly upon request by Bank, the Borrowers shall deliver to the Bank such operating budgets and forecasts of Borrowers' cash flows, expenses and Borrowing Base availability as Bank may reasonably require, all of which shall be in form and content satisfactory to Bank.

	Upon request by Bank and in any event at least contemporaneously with the delivery of Financial Statements, a copy of Borrowers' brokerage account statement evidencing Borrowers' compliance with the Liquidity Covenant set forth below.

"Financial Statements" means Borrowers' consolidated and consolidating balance sheet and statements of income and cash flows prepared in accordance with generally accepted accounting principles in effect from time to time ("GAAP") applied on a consistent basis (subject in the case of interim statements to normal year-end adjustments).

In the event that any financial information submitted to the Bank has been prepared by an outside accountant, the same shall be accompanied by a statement in writing signed by the accountant disclosing that the accountant is aware that the information prepared by such accountant would be submitted to and relied upon by the Bank in connection with the Bank's determination to grant or continue credit. 

	FINANCIAL COVENANTS:

	The Borrowers shall maintain at all times a minimum Consolidated Tangible Net Worth of $22,000,000.00.

	The Borrowers shall have at all times unencumbered cash and cash equivalents satisfactory to Bank with a value of at least $2,000,000, maintained with financial institutions or brokerage firms in one or more accounts located in the United States of America (the "Liquidity Covenant").

	Borrowers shall have Consolidated EBITDA of (a) not worse than negative $2,000,000.00 for the fiscal quarter ending June 30, 2002; (b) not less than $125,000.00 for the fiscal quarter ending September 30, 2002; (c) not less than $370,000.00 for the fiscal quarter ending December 31, 2002; and (d) not less than $500,000.00 for the fiscal quarter ending March 31, 2003 and for each fiscal quarter of Borrower ending thereafter.

	The Borrowers shall not make or incur capital expenditures in excess of $400,000 in the aggregate during any fiscal year.

As used herein:

"Consolidated EBITDA" means, for any period, Borrowers' consolidated net income, plus interest expense, plus income tax expense, plus depreciation, plus amortization. 

"Consolidated Tangible Net Worth" means, as of any date, Borrowers' consolidated stockholder's equity, less any advances to affiliated parties, less all items properly classified as intangibles, in accordance with GAAP.

All of the above financial covenants shall be computed and determined in accordance with GAAP applied on a consistent basis (subject to normal year-end adjustments).

	NEGATIVE COVENANTS:

	The Borrowers will not create, assume, incur or suffer to exist any mortgage, pledge, encumbrance, security interest, lien or charge of any kind upon any of its property, now owned or hereafter acquired, or acquire or agree to acquire any kind of property under conditional sales or other title retention agreements; provided, however, that the foregoing restrictions shall not prevent the Borrowers from:

	incurring liens for taxes, assessments or governmental charges or levies which shall not at the time be due and payable or can thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which it has created adequate reserves;

	making pledges or deposits to secure obligations under workers' compensation laws or similar legislation;

	granting additional liens or security interests to secure existing or future indebtedness in an aggregate principal amount not to exceed $100,000 at any time, provided such liens and security interests shall encumber only those assets of Borrowers acquired with the proceeds of such indebtedness;

	entering into leases, as lessee, for real or personal property, provided that the aggregate annual rental obligations of Borrowers under all such leases shall not exceed $50,000; or

	granting liens or security interests in favor of the Bank.

	The Borrowers will not create, incur, guarantee, endorse (except endorsements in the course of collection), assume or suffer to exist any indebtedness, except:

	indebtedness to the Bank;

	open account trade debt incurred in the ordinary course of business and not past due, or

	indebtedness in respect of which liens are permitted under subparagraphs (1)(c) and 1(d) above, and any refinancings thereof; provided that the amount of the refinancing indebtedness is not more than the outstanding amount of the refinanced indebtedness, and the terms of the refinancing indebtedness are no more favorable to the lender than the terms of the refinanced indebtedness.

	The Borrowers will not liquidate, or dissolve, or merge or consolidate with any person, firm, corporation or other entity, or sell, lease, transfer or otherwise dispose of all or any substantial part of its property or assets, whether now owned or hereafter acquired, which at the time of such disposition has a fair market value in excess of $100,000.

	The Borrowers will not make acquisitions of all or substantially all of the property or assets of any person, firm, corporation or other entity.

	The Borrowers will not declare or pay any dividends on or make any distribution with respect to any class of its equity, or purchase, redeem, retire or otherwise acquire any of its equity. 

	The Borrowers will not make or have outstanding any loans or advances to or otherwise extend credit to any person, firm, corporation or other entity, except in the ordinary course of business, or make any investments, except for cash equivalents.

	Borrowers shall not enter into any agreement with any other party which shall prohibit the Borrowers from granting, creating or suffering to exist, or otherwise restrict in any way (whether by covenant, by identifying such event as a default under such agreement or otherwise) the ability of the Borrowers to grant, create or suffer to exist in favor of Bank, any lien, security interest or other charge or encumbrance upon or with respect to any of Borrowers' assets.

	The Borrowers shall notify the Bank in writing not less than five (5) business days prior to entering into any credit agreement or any amendment or modification to any existing credit agreement, in either case as permitted under the Loan Documents, pursuant to which any Borrower agrees to representations, warranties, covenants or terms which are more restrictive to such Borrower than those contained in any of the Loan Documents (the "More Restrictive Provisions"). Upon execution of such new agreement, amendment or modification, the corresponding covenants, terms and conditions of the Loan Documents shall be and are automatically and immediately deemed to be amended to conform with and to include the More Restrictive Provisions with respect to all Borrowers; provided, however, that the foregoing shall not be applicable to or be deemed to affect any provision of the Loan Documents if any new credit agreement, amendment or modification is less restrictive to any Borrower. The Borrowers hereby agree promptly to execute and deliver any and all such documents and instruments and to take all such further actions as the Bank, in its sole discretion, may deem necessary or appropriate to effectuate the provisions of this paragraph.

SCHEDULE 6(C)

TO LETTER AGREEMENT

DATED MAY 29, 2002

Executive Officers of inTest Corporation

Alyn R. Holt - Chairman

Robert E. Matthiessen - President and CEO

Hugh T. Regan, Jr. - Secretary, Treasurer and CFO

Steve G. Radakovich - Vice President Operations and COO

Daniel J. Graham - Executive Vice President and Vice Chairman

Jerome R. Bortnem - Vice President - Sales & Marketing

Jack R. Edmunds - Vice President - Supply Chain Management

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00042-of-00352.parquet"}]]