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FORM OF REVOLVING CREDIT LOAN AGREEMENT

Loan Agreement

FORM OF REVOLVING CREDIT LOAN AGREEMENT | Document Parties: US MedSys Corp You are currently viewing:
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Title: FORM OF REVOLVING CREDIT LOAN AGREEMENT
Governing Law: New Jersey     Date: 4/6/2005

FORM OF REVOLVING CREDIT LOAN AGREEMENT, Parties: us medsys corp
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EXHIBIT 4.04

FORM OF

REVOLVING CREDIT LOAN AGREEMENT

THIS REVOLVING CREDIT LOAN AGREEMENT (the "Agreement"), is made this ___

day of ________, 2005, by and between U.S. MedSys Corp. ("Borrower"), and

____________ ("Lender").

WHEREAS, Borrower is desirous of borrowing sums from time to time up to an

aggregate amount of One Hundred Thousand Dollars ($100,000) from Lender in the

form of a revolving line of credit; and

WHEREAS, Lender is willing to provide the above-described loans to

Borrower on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants

herein contained, the parties agree as follows:

1. Terms of Revolving Credit Facility. Subject to the terms and conditions

of this Agreement, Lender hereby agrees to establish a revolving credit facility

(hereinafter, the "Revolving Credit Facility") in the maximum amount of One

Hundred Thousand Dollars ($100,000) in favor of Borrower on the following terms

and conditions:

a. The term of the Revolving Credit Facility shall begin on the date

of this Agreement and shall end on the one year anniversary of the date of this

Agreement, unless accelerated pursuant to Section 5 hereinbelow (the

"Termination Date").

b. Advances of funds under the Revolving Credit Facility (each an

"Advance") may be made, at the discretion of Lender in accordance with the terms

of this Agreement, at any time prior to the Termination Date upon receipt by

Lender of written request therefor from Borrower; at no time shall the aggregate

obligation of Borrower to Lender exceed One Hundred Thousand Dollars ($100,000).

Each advance shall be due and payable 90 days after the date that funds for the

advance are received by the Borrower (each a "Repayment Date"). Borrower may at

any time prior to the Repayment Date repay all or any part of said loans under

the Revolving Credit Facility and subsequently receive further advances,

consistent with the terms and conditions hereof. All Advances shall be sent by

wire transfer pursuant to the instructions attached at Exhibit A.

c. At the time of each Advance, Borrower shall execute and deliver

to Lender a promissory note (in each instance, the "Note") in the form attached

hereto as Exhibit B and incorporated by reference herein.

d. The principal amount due for each Advance shall bear simple

interest at the rate of twelve percent (12%) per annum.

e. Borrower may prepay any Advance at any time in any amount without

premium or penalty.

f. Amounts borrowed under the Revolving Credit Facility shall be

used for the purposes specified in Section 9.b. of this Agreement.

g. As additional consideration for Lender's commitment to provide

the Revolving Credit Facility, Borrower shall issue to Lender 50,000 shares of

restricted common stock of

REVOLVING CREDIT LOAN AGREEMENT Page 1 of 6

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FORM OF

Borrower. Lender is an accredited investor and shall provide to Borrower

additional written representations and warranties, as are reasonably requested

by Borrower, to ensure compliance with applicable securities laws. In an Event

of Default (hereinafter defined), Lender shall have the right to demand that

Borrower file a registration statement to register the shares for resale by the

Lender, in the same manner as described in Section 4 below.

2. Fees and Expenses. Borrower agrees to reimburse Lender for all

out-of-pocket costs and expenses incurred by Lender in connection with the

protection, enforcement and collection of all amounts advanced under the

Revolving Credit Facility. These costs are to include all costs and expenses

incurred in enforcing the rights of Lender under this Agreement whether or not

upon the occurrence of any Event of Default (hereinafter defined).

3. Promises to Pay. Borrower promises to pay to Lender when due, whether

by normal maturity, acceleration or otherwise, the entire outstanding principal

amount of the Revolving Credit Facility, together with interest, and all other

amounts payable by Borrower to Lender hereunder, including costs of collection,

in accordance with the terms of this Agreement and each Note.

4. Collateral. Borrower shall issue 200,000 shares of restricted common

stock to be held in escrow as collateral security to ensure repayment of any

Advances. In an Event of Default (hereinafter defined), Lender shall have the

right to demand that Borrower file a registration statement to register the

shares for resale by the Lender. If a registration statement is not declared

effective within sixty days after demand by Lender, Borrower shall be liable for

a 10% of the principal amount due as penalty for each 30 day period thereafter

until effective, up to a maximum of 100%. Upon the effectiveness of such

registration, the Lender has the right to accept the 200,000 shares as payment

and satisfaction in full of any Advance, Note, principal, interest, fees and

expenses permitted under the Agreement; and the escrow agent shall release the

200,000 shares to Lender. If there has been no Event of Default, then at the

Termination Date, the shares shall be returned to Borrower for cancellation.

Borrower and Lender shall enter into an escrow agreement with Joseph Emas, Esq.,

as escrow agent.

5. Events of Default; Acceleration. Any or all of the liabilities of

Borrower to the Lender in connection with the Revolving Credit Facility shall,

at the option of Lender, be immediately due and payable upon the occurrence of

any of the following events of default (each of which shall be hereinafter

referred to as an "Event of Default"): (a) default in the payment, when due or

payable, of any obligation of Borrower under this Agreement or the Note; (b) if

any representation or warranty by Borrower hereunder is not complete or accurate

at any time that any advances are outstanding hereunder; (c) failure of Borrower

after request by Lender to permit the inspection of books or records of

Borrower; (d) issuance of any injunction or of an attachment or judgment against

any property of Borrower that is not discharged within thirty (30) days after

issuance; (e) the insolvency of Borrower, or the filing of any bankruptcy,

reorganization, debt arrangement or other proceeding or case against Borrower

under any bankruptcy or insolvency law or commencement of any dissolution or

liquidation proceeding against Borrower, any of which is either consented to or

acquiesced in by Borrower or remains undismissed for thirty (30) days after the

date of entry or the commencement by Borrower of a voluntary case under the

federal bankruptcy laws or any state insolvency or similar laws, or the consent

by Borrower to the appointment of a receiver, liquidator, assignee, trustee,

custodian or similar official for Borrower or any of its property, or the making

by Borrower of any assignment for the benefit of creditors or the failure by

Borrower generally to pay Borrower's debts, as the case may be, as they become

due; (f) a change in the condition or affairs (financial or otherwise) of

Borrower that in the opinion of the Lender increases Lender's risk in connection

with the Revolving Credit Facility or impairs the

REVOLVING CREDIT LOAN AGREEMENT Page 2 of 6

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FORM OF

prospect of timely payment of the Revolving Credit Facility; (g) default in the

performance of any obligation, covenant or agreement contained or referred to

herein or in the Note; or (h) failure of a "Condition of Lending" described

hereinafter in Sec


 
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