REVOLVING CREDIT AND SECURITY AGREEMENT

Section 1.    Introduction .

THIS REVOLVING CREDIT AND SECURITY AGREEMENT (this “Agreement”) is entered into this 17th day of April, 2007 by and between PRESIDENTIAL HEALTHCARE CREDIT CORPORATION (“PHCC”) and PARK INFUSION CARE, LP, a Texas limited partnership, formerly known as PARK INFUSION SERVICES, LP, d/b/a PARK INFUSION CARE, PARK INFUSIONCARE OF DALLAS, LP, a Texas limited partnership, PARK INFUSIONCARE OF HOUSTON, LP, a Texas limited partnership and PARK INFUSIONCARE OF SAN ANTONIO, LP, a Texas limited partnership (together, jointly and severally, the “Provider”). Subject to the terms and conditions of this Agreement, the Provider wishes to obtain a revolving credit loan from PHCC and PHCC wishes to make a revolving credit loan to the Provider. Capitalized terms used herein, unless otherwise defined, shall have the meanings set forth in Appendix I   to this Agreement.

NOW, THEREFORE, in consideration of the premises and in order to induce PHCC to make the Loan, PHCC and the Provider agree as follows.

Section 2.    Amount and Payment of Loan .

(a)    (i)PHCC agrees, on the terms and subject to the conditions hereinafter set forth, to review Advance Requests from the Provider, and to make Advances to the Provider during the period from the date hereof to, but not including, the earlier of (A) the date of termination in whole of this Agreement pursuant to Section 12; and (B) the Scheduled Maturity Date. Amounts borrowed hereunder may be repaid and borrowed again from time to time provided that no Event of Default shall have occurred. The principal amount of the Loan outstanding shall not exceed the Maximum Aggregate Loan Amount at any time.

(ii)    Any determination as to whether there is availability for Advances shall be made by PHCC in its reasonable sole discretion and is final and binding upon the Provider. Subject to the provisions of this Agreement, the Provider may request Advances up to and including the value, in U.S. Dollars, of the “Availability Amount” which shall equal (A) eighty-five percent (85%) of the Net Value of Eligible Receivables minus, (B) if applicable, amounts reserved pursuant to this Agreement. In addition, if at any time Provider is not entitled to any advances by the terms of this Agreement, PHCC may, in its sole discretion, make requested advances upon the payment of an overadvance fee (an “Overadvance Fee”) in the amount of one thousand dollars ($1,000.00); however, it is expressly acknowledged and agreed that, in such event, Provider shall have the right, in its sole discretion, to decline to make any requested advance and to require any payment required under the terms of the Agreement without prior notice to Provider and the making of any such advances shall not be construed as a waiver of such right by PHCC.

(iii)    If at any time the outstanding balance of the Loan exceeds the lesser of (A) the Availability Amount, or (B) the Maximum Aggregate Loan Amount, then Borrower shall not be entitled to any additional Advances under the Loan while such excess exists and shall immediately remit to PHCC immediately available funds sufficient to eliminate such excess and, if PHCC requests, deliver to PHCC additional collateral of a value and character satisfactory to PHCC.

(iv)    In the event that the availability of the Loan hereunder expires by the terms of this Agreement, or by the terms of any agreement extending the Scheduled Maturity Date of the Loan, PHCC may, in its sole discretion, make requested Advances; however, it is expressly acknowledged and agreed that, in such event, PHCC shall have the right, in its sole discretion, to decline to make any requested Advance and may require payment in full of the Loan at any time without prior notice to Provider and the making of any such Advances shall not be construed as a waiver of such right by PHCC.

(v)    PHCC, in its reasonable sole credit judgment, may further adjust the Availability Amount based upon the Provider’s actual, recent collection history for each payor class (i.e., Medicare, Medicaid, commercial insurance, etc.) in a manner consistent with PHCC’s underwriting practices and procedures, including, without limitation, PHCC’s review and analysis of, among other things, the Provider’s historical returns, rebates, discounts, credits and allowances. Also, PHCC shall have the right to establish from time to time, in its reasonable sole credit judgment, reserves against the Availability Amount, which reserves shall have the effect of reducing the amounts otherwise eligible to be disbursed to the Provider.

(vi)    Advances may be made by PHCC without an Advance Request as hereinafter provided for the payment of interest due and payable on the Loan and Fees and Reimbursable Expenses and for the payment of fees due to the Servicer under the Servicing Agreement when such interest and/or fees are due to the extent other moneys have not been made available by Provider to PHCC (or, in the case of fees due Servicer, to Servicer) for such payments and there is sufficient Availability Amount for such Advances.

(b)    (i)Advances made by PHCC shall be evidenced by, and repayable with interest in accordance with, a single Revolving Variable Rate Note of the Provider payable to the order of PHCC, dated of even date herewith, in the form of Exhibit B hereto (the “Note”). PHCC shall record the date and amount of each Advance made and the date and amount of each payment of principal thereof, and any such recordation shall constitute prima facie evidence of the accuracy of the information so recorded. PHCC shall, on behalf of the Provider, maintain a register (the “Register”) for the recordation of (i) the names and addresses of PHCC and any assignees of PHCC and (ii) the Commitment of, and the principal amount and interest of the Loans owing to, PHCC or any assignee from time to time.

The entries in the Register shall be conclusive, in the absence of manifest error, and the Provider, PHCC, and each assignee of PHCC shall treat each Person whose name is recorded in the Register as the owner of the Loans for all purposes of this Agreement. The Note shall (A) be dated the date of issuance thereof, or, with respect to any amendment thereof, the date of such amendment, (B) mature on the Scheduled Maturity Date and (C) provide for the payment of interest in accordance with Section 2(c)(ii). The aggregate principal amount outstanding under the Note, together with accrued but unpaid interest thereon, Fees and Reimbursable Expenses shall be due and payable on the Scheduled Maturity Date.

(ii)    The Provider may, in its discretion, prepay the Loan in whole or in part at any time by paying all or any part of the outstanding principal balance of the Note plus accrued interest and all other Fees and Reimbursable Expenses then due (the “Prepayment Amount”). The Provider shall prepay the Loan in full immediately upon demand of PHCC after the occurrence of an Event of Default by paying the Prepayment Amount.

(c)    (i)Advances shall accrue interest at the rate and in the manner set forth in the Note. The Provider shall make payments of interest and principal as hereinafter described (the “Loan Payments”).

(ii)    Accrued interest shall be due and payable on each Interest Payment Date.

(iii)    Except as otherwise expressly provided by this Agreement, the obligations of the Provider to make the Loan Payments, to make payments of any Fees and Reimbursable Expenses, and to perform and observe the covenants and agreements contained herein shall be absolute and unconditional under all circumstances, without abatement, diminution, deduction, setoff or defense for any reason. Except as otherwise may be expressly provided by this Agreement, the Provider shall make all such payments when due and shall not withhold any Loan Payments or other payments due under the Provider Agreements pending final resolution of any dispute with PHCC, nor shall the Provider assert any right of setoff or counterclaim against its obligation to make any such payments required under the Provider Agreements.

(iv)   Regardless of any provision contained in any of the Loan Documents, in no contingency or event whatsoever shall the aggregate of all amounts that are contracted for, charged or received by PHCC pursuant to the terms of this Agreement or any of the other Loan Documents and that are deemed interest under applicable law exceed the highest rate permissible under applicable law.

No agreements, conditions, provisions or stipulations contained in this Agreement or any of the other Loan Documents or the exercise by PHCC of the right to accelerate the payment or the maturity of all or any portion of the Obligations, or the exercise of any option whatsoever contained in any of the Loan Documents, or the prepayment by the Provider of any of the Obligations, or the occurrence of any contingency whatsoever, shall entitle PHCC to charge or receive in any event, interest or any charges, amounts, premiums or fees deemed interest by applicable law (such interest, charges, amounts, premiums and fees referred to herein collectively as “Interest”) in excess of the Maximum Rate and in no event shall the Provider be obligated to pay Interest exceeding such Maximum Rate, and all agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate or compel the Provider to pay Interest exceeding the Maximum Rate shall be without binding force or effect, at law or in equity, to the extent only of the excess of Interest over such Maximum Rate. If any Interest is charged or received in excess of the Maximum Rate (“Excess”), the Provider acknowledges and stipulates that any such charge or receipt shall be the result of an accident and bona fide error, and such Excess, to the extent received, shall be applied first to reduce the principal Obligations and the balance, if any, returned to the Provider, it being the intent of the parties hereto not to enter into a usurious or otherwise illegal relationship. The right to accelerate the maturity of any of the Obligations does not include the right to accelerate any Interest that has not otherwise accrued on the date of such acceleration, and PHCC does not intend to collect any unearned Interest in the event of any such acceleration. Provider recognizes that, with fluctuations in the rates of interest set forth in the Note and the Maximum Rate, such an unintentional result could inadvertently occur. All monies paid to PHCC hereunder or under any of the other Loan Documents, whether at maturity or by prepayment, shall be subject to any rebate of unearned Interest as and to the extent required by applicable law. By the execution of this Agreement, the Provider covenants that (i) the credit or return of any Excess shall constitute the acceptance by the Provider of such Excess, and (ii) the Provider shall not seek or pursue any other remedy, legal or equitable, against PHCC, based in whole or in part upon contracting for, charging or receiving any Interest in excess of the Maximum Rate. For the purpose of determining whether or not any Excess has been contracted for, charged or received by PHCC, all Interest at any time contracted for, charged or received from the Provider in connection with any of the Loan Documents shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread in equal parts throughout the full term of the Obligations. The Provider and PHCC shall, to the maximum extent permitted under applicable law, (i) characterize any non-principal payment as an expense, fee or premium rather than as Interest and (ii) exclude voluntary prepayments and the effects thereof. The provisions of this Section 2(c)(iv) shall be deemed to be incorporated into every Loan Document (whether or not any provision of this Section is referred to therein). All such Loan Documents and communications relating to any Interest owed by the Provider and all figures set forth therein shall, for the sole purpose of computing the extent of Obligations, be automatically recomputed by the Provider, and by any court considering the same, to give effect to the adjustments or credits required by this Section 2(c)(iv).

(d)    On or before the Closing Date, the Provider shall pay to PHCC a nonrefundable commitment fee in an amount equal to one percent (1%) of the Maximum Aggregate Loan Amount (“Initial Commitment Fee”).

(e)    All payments and reimbursements to PHCC made under any Provider Agreement shall be free and clear of, and without deduction for, all taxes, levies, imposts, deductions, assessments, charges or withholdings and all liabilities with respect thereto of any nature whatsoever, excluding taxes to the extent imposed on PHCC’s net income. If PHCC shall be required by law to deduct any such amounts from or in respect of any sum payable under any Provider Agreement to PHCC, then the sum payable to PHCC shall be increased as may be necessary so that, after making all required deductions, PHCC receives an amount equal to the sum it would have received had no such deductions been made. Notwithstanding any other provision of any Provider Agreement, if at any time after the Closing Date (i) any change in any existing law, regulation, treaty or directive or in the interpretation or application thereof, (ii) any new law, regulation, treaty or directive enacted or any interpretation or application thereof, or (iii) compliance by PHCC with any request or directive (whether or not having the force of law) from any governmental authority: (A) subjects PHCC to any tax, levy, impost, deduction, assessment, charge or withholding of any kind whatsoever with respect to any Provider Agreement, or changes the basis of taxation of payments to PHCC of any amount payable thereunder (except for net income taxes, or franchise taxes imposed in lieu of net income taxes, imposed generally by federal, state or local taxing authorities with respect to interest, Reimbursable Expenses and Fees payable hereunder or changes in the rate of tax on the overall net income of PHCC, or (B) imposes on PHCC any other condition or increased cost in connection with the transactions contemplated thereby or participations therein; and the result of any of the foregoing is to increase the cost to PHCC of making or continuing any Loan or Advance hereunder or to reduce any amount receivable hereunder, then, in any such case, the Provider shall promptly pay to PHCC any additional amounts necessary to compensate PHCC, on an after-tax basis, for such additional cost or reduced amount as determined by PHCC. If PHCC becomes entitled to claim any additional amounts pursuant to this Section it shall promptly notify the Provider of the event by reason of which PHCC has become so entitled, and each such notice of additional amounts payable pursuant to this Section submitted by PHCC to the Provider shall, absent manifest error, be final, conclusive and binding for all purposes and shall be payable on each Interest Payment Date.

(f)    (i)The Servicer will prepare and deliver an Availability Certificate to the Provider by 10:00 a.m. on the Business Day prior to each Advance Day. The Availability Certificate shall identify the aggregate Net Value of all Eligible Receivables pledged to PHCC as Collateral hereunder, the outstanding principal balance of the Loan, all Reimbursable Expenses and Fees then due, the Availability Amount and such other information regarding Eligible Receivables as is required by the Availability Certificate.

(ii)   Each Advance Request shall be made by the Provider prior to 12:00 p.m. (Central Standard/Daylight Time) on the Advance Day by an Authorized Person by delivery to PHCC with a copy to the Servicer.

(iii)   Upon receipt of the Advance Request and satisfaction of all applicable conditions set forth in this Section 2, PHCC shall disburse the amount of the Advance on the Advance Day by crediting the same to the account of the Provider identified in Exhibit C or such other account as may be designated in writing by an Authorized Person of the Provider.

(iv)   No Advance shall cause the aggregate principal balance outstanding on the Loan to exceed the Maximum Aggregate Loan Amount.

(g)    The Provider shall use Advances for the purpose of supporting the Provider’s business operations and for any other general business needs.

(h)    (A)As a condition precedent to the obligation of PHCC to disburse the initial Advance under this Agreement, the following shall have been received by PHCC and the following actions shall have been taken to the satisfaction of PHCC:

(i)    the Provider Agreements, properly executed on behalf of the Provider;

(ii)    a certificate of an authorized officer, manager or managing member, as the case may be, of the Provider, certifying as to (i) the resolutions of the Provider’s board of directors, general partner(s) or managing member(s), as the case may be, authorizing the execution, delivery and performance of the Provider Agreements and any related documents and (ii) the signatures of each Authorized Person authorized to execute and deliver the Provider Agreements and other instruments, agreements and certificates on behalf of the Provider and to request Advances;

(iii)    if applicable, a Certificate of Good Standing issued as to the Provider by the Secretary of the State of the Provider’s state of organization not more than 30 days prior to the Closing Date;

(iv)    payment of Reimbursable Expenses due on the Closing Date, the Initial Commitment Fee and such other fees, commissions and expenses required to be paid by the Provider pursuant to the Provider Agreements as of the Closing Date;

(v)    acknowledgment copies of proper financing statements (Form UCC-1) naming the Provider as the debtor and naming PHCC as the secured party or other similar documents or instruments as may be necessary, or in the opinion of PHCC desirable, under the UCC, as amended from time to time, of all appropriate jurisdictions, or any comparable law, to perfect PHCC’s security interest in all Collateral which may be pledged by the Provider to PHCC hereunder;

(vi)    certified copies (or copies otherwise satisfactory to PHCC) of Requests for Information or Copies (Form UCC-11) (or a similar search report certified by a Person acceptable to PHCC) listing all effective financing statements (including those referred to in subsection (v) above) which name the Provider (under its present name and any previous name) as debtor or seller and which are filed in the jurisdictions in which filings were made pursuant to subsection (v)   above, together with copies of such financing statements and searches of applicable federal and state court and agency dockets and lien records showing all judgment, tax and ERISA liens affecting the Provider or the Collateral, none of which (except those filed pursuant to subsection (v) above) shall cover any of the Collateral to be pledged by the Provider to PHCC or any related Contracts unless the documents referred to in subsection (vii) below cover such financing statements;

(vii)    releases and acknowledgment copies of proper Termination Statements, if any, necessary to evidence the release of all security interests, ownership and other rights of any Person in the Collateral previously granted by the Provider;

(viii)    a copy of the Servicing Agreement and any Addendums thereto requested by PHCC, duly authorized, executed and delivered by the Provider and the Servicer, together with evidence satisfactory to PHCC that the Provider has established an account at an insured depositary institution into which all payments with respect to the Healthcare Receivables will be deposited;

(ix)    as requested by PHCC from time to time, a copy of all of the Provider’s forms of patient consent to be signed by each patient for which a Healthcare Receivable is or was created which authorizes the demographic and medical information with respect to such patient to be disclosed to, and by, the Servicer;

(x)    PHCC shall have completed examinations, the results of which shall be satisfactory in form and substance to PHCC, of the Collateral, the financial statements and the books, records, business, obligations, financial condition and operational state of the Provider, and the Provider shall have demonstrated to PHCC’s satisfaction that (A) its operations comply, in all respects deemed material by PHCC, in its sole reasonable judgment, with all applicable federal, state, foreign and local laws, statutes and regulations, (B) its operations are not the subject of any governmental investigation, evaluation or any remedial action which could result in any expenditure or liability deemed material by PHCC, in its sole judgment, and (C) it has no liability (whether contingent or otherwise) that is deemed material by PHCC, in its reasonable sole judgment;

(xi)    the various mechanisms for creating and perfecting the security interests in the Collateral are in effect and can be utilized with respect to the Collateral;

(xii)    all Collateral in which PHCC has been granted, or may demand, a security interest are owned outright by the Provider, are not subject to claim, assignment or setoff, and are in the physical or constructive possession or control of PHCC;

(xiii)    the Provider has the unrestricted right to pledge the Collateral as contemplated herein;

(xiv)    such other documents, opinions or certificates as PHCC may reasonably request; and

(xv)    an Availability Certificate and Advance Request in the form of Exhibit E duly executed by an Authorized Person.

(B)   As a condition precedent to the continuing obligation of PHCC to make each Advance, the following conditions (in addition to those enumerated under Section 2(h)(A) hereinabove) shall be satisfied by the Provider:

(i)    all representations and warranties of the Provider contained herein and in each other Provider Agreement shall be true and complete in all material respects (determined for this purpose as if all qualifications to such representations and warranties based on knowledge or materiality were omitted) at all times during the term of this Agreement;

(ii)    the Provider shall have performed and complied in all material respects with all obligations and agreements and all covenants and conditions contained in this Agreement and in each other Provider Agreement to which it is a party to be performed or complied with by it at all times (such performance or compliance to be determined for this purpose as if all qualifications to such obligations, agreements, covenants and conditions based on the use of diligent efforts or best efforts were omitted) and PHCC shall have received evidence, in form and substance reasonably satisfactory to it, of such performance and compliance;

(iii)    all corporate actions necessary to authorize (A) the execution, delivery and continuing performance by the Provider of this Agreement and of each other Provider Agreement to which it is a party and (B) the consummation of the transactions contemplated hereby and thereby shall have been and shall continue to be duly and validly taken by the Provider and shall be in full force and effect. All such actions and all other actions, proceedings, instruments and documents required to carry out the transactions contemplated hereby or incidental hereto and all other related legal matters shall be reasonably satisfactory to and approved by counsel for PHCC and such counsel shall be furnished with such certified copies of such corporate actions and proceedings and such other instruments and documents as it shall have reasonably requested from time to time;

(iv)    no event has occurred and is continuing, or would result from such Advance, which constitutes an Event of Default; and

(v)    the Provider shall provide with each Advance Request an Availability Certificate and Advance Request in the form of Exhibit E duly executed by an Authorized Person.

Each Advance Request shall constitute a representation that the above is true and that the statements set forth in Sections 7 and 8 are correct.

(i)    PHCC’s Commitment shall terminate on the Scheduled Maturity Date unless this Agreement is terminated prior thereto.

Section 3.    Servicing of Healthcare Receivables . Healthcare Receivables will be serviced by the Servicer pursuant to the terms and conditions of the Servicing Agreement. Under the terms of the Servicing Agreement, the Servicer shall act as the agent of the Provider, shall service the Healthcare Receivables in accordance with the directions of the Provider and shall, as agent of the Provider, disburse proceeds of the Healthcare Receivables as directed by the Provider under the Servicing Agreement.

If the Provider determines, for any reason, to terminate or remove the Servicer, the Provider may do so only upon not less than thirty (30) days’ prior written notice to the Servicer, with a copy of such notice sent to PHCC, along with (i) a certified copy of the resolution unanimously adopted by the governing body of the Provider authorizing and directing that the Servicer be terminated as agent under the Servicing Agreement and (ii) a certificate signed by the Provider, evidencing termination of the Servicing Agreement, subject to appointment of a successor to the Servicer as provided below (provided, however, that the foregoing shall not impede the Provider’s ability to change a return address or instructions with respect to Governmental Obligors as contemplated by Section 4(b) or change an automatic transfer instruction as contemplated by Section 4(f)). In addition, if the Servicer is in default under the terms of the Servicing Agreement, PHCC shall have the right to obtain the removal or termination of the Servicer for cause and the right to have the Provider appoint a successor Servicer, subject to the last sentence of this Section. No termination or removal of a Servicer, whether by the Provider or at the direction of PHCC for cause as provided herein, shall be effective unless, prior to the date such termination or removal is to be effective, the Provider has selected a successor Servicer acceptable to PHCC and such successor Servicer has accepted its appointment by the Provider in writing.

Section 4.    Post Office Box and Provider Lockbox Account For Healthcare Receivables .

(a)    On or prior to the date hereof, Provider, pursuant to the Servicing Agreement, shall have established in its own name (1) a post office box for the receipt of all items with respect to Healthcare Receivables (the “Lockbox”), and (2) an account at an insured depository institution approved by PHCC for the deposit of all Collections and payments on the Healthcare Receivables (the “Lockbox Account”)

The Lockbox Account shall be subject at all times to a control agreement in form satisfactory to PHCC in PHCC’s reasonable sole discretion (the “Control Agreement”), said control agreement to be among PHCC, Provider and the financial institution at which the Lockbox Account is established.

(b)    The Provider hereby covenants and agrees that, on and after the date hereof, all claims (including CMS 1500 or related insurance billing forms) to be sent to Obligors (and return envelopes, if provided by the Provider) shall set forth only the address of the Lockbox as a return address for payment of Healthcare Receivables and delivery of all EOB/ERAs and only the Lockbox Account as the account into which wire transfers for Collections and payment on Healthcare Receivables shall be deposited. The Provider hereby further covenants and agrees to instruct and notify each of the members of the Provider’s accounting and collections staff, and of the Servicer’s accounting and collection staff, to provide identical information in communications with Obligors with respect to collections, wire transfers and EOB/ERAs on Healthcare Receivables. With respect to Non-Governmental Obligors, the Provider shall not change such return address or the instructions in any Obligor Notice without the express prior written consent of PHCC. With respect to Governmental Obligors, Provider remains free to change such return address and the instructions in any Obligor Notice; provided, however, any such change undertaken by Provider without the express written permission of PHCC shall constitute a breach of this Agreement.

(c)    Unless an Event of Default exists or a court order to the contrary is received, the Provider will retain the right to receipt of Collections and payment of the Healthcare Receivables and all rights to demand or make claims under the applicable Governmental program for any Governmental Receivable to the extent provided under the Servicing Agreement. The Provider shall remit daily to the Servicer all amounts which the Provider receives with respect to the Healthcare Receivables (whether received in the Lockbox, the Lockbox Account, or otherwise, and whether accomplished through the mechanism described in subsection (f) below or otherwise), and shall notify PHCC and the Servicer of all such amounts, including information as to the Healthcare Receivables to which such amounts relate and copies of any related EOB/ERAs. Provider hereby instructs the Servicer to pay all amounts so received on a daily basis to PHCC. PHCC will immediately credit to interest owing hereunder and to any outstanding line of credit balance all such amounts that were received from account debtors which are or were at one time account debtors on Eligible Receivables; provided, however, that in no case shall PHCC be required to credit Provider with the amount of any check or other instrument constituting provisional payment until PHCC has received final payment thereof at its office in the form of immediately available funds accepted by PHCC. Unless an Event of Default exists, PHCC (or Servicer on PHCC’s behalf) shall pay to Provider daily (i) all such amounts that were received from account debtors which are not and were never account debtors on Eligible Receivables, and (ii) any such amounts received on a day when the outstanding principal and interest balance on Provider’s line of credit under this Agreement is zero or less than zero.

(d)    If an Obligor makes a payment on a Healthcare Receivable other than to the Lockbox or the Lockbox Account, with respect to wire transfers the Provider shall promptly give written notice thereof to PHCC and the Provider shall take all necessary steps to effect the collection of such payment from any other Person claiming an interest therein or having possession thereof and deliver such to the Servicer together with all necessary endorsements. If the Provider itself shall receive any amounts with respect to a Healthcare Receivable (other than receipts into the Lockbox or the Lockbox Account, which receipts are addressed elsewhere in this Agreement), the Provider shall so notify PHCC and the Servicer immediately and shall hold all checks and instruments received in trust for PHCC and shall deliver to Servicer such checks and other instruments duly endorsed to PHCC (or, at the direction of PHCC, the proceeds thereof) without delay or setoff, including information as to the Healthcare Receivable to which such amounts relate and copies of any related EOB/ERAs. The Provider shall cooperate with PHCC and the Servicer in the identification of items deposited in the Lockbox or the Lockbox Account.

(e)    All deliveries and notifications referred to in this Section 4 shall be made promptly upon the Provider’s receipt of any such amount or information and delivery to PHCC and the Servicer thereof shall be no later than midnight Central Time within three (3) days of receipt by the Provider (except with respect to delivery of tangible items, which shall be no later than 5:00 pm CST on the business day after receipt by the provider).

(f)    Pursuant to the Servicing Agreement, the Provider shall instruct the financial institution holding the Lockbox and the Lockbox Account to transfer, or cause to be transferred, to the account described in the Servicing Agreement, automatically, at the end of each Business Day, all amounts on deposit in the Lockbox Account. No Person, other than the Provider, shall have the right to change or cancel the foregoing automatic transfer instruction; provided, however, that the Provider shall not make such change or cancellation other than pursuant to the Servicing Agreement and as provided in the Addendum to the Servicing Agreement.

Section 5.    Security Interest .

(a)    This Agreement is intended to constitute a security agreement within the meaning of the UCC. As security for the Obligations, the Provider hereby assigns, pledges and grants to PHCC a first priority continuing security interest in all right, title and interest of the Provider in, to and under all of the following, whether now or hereafter owned, existing, created, arising or acquired (collectively, the “Collateral”):

(i)    Healthcare Receivables, all related Contracts and all Collections with regard thereto, any and all amounts now or hereafter due to the Provider from the Lockbox, the Lockbox Account, all funds on deposit in each of the foregoing with regard thereto and all certificates and instruments, if any, from time to time evidencing the Lockbox and the Lockbox Account and such funds of the Provider on deposit therein, all claims thereunder or in connection therewith, all software and books and records relating to any of the foregoing, all general intangibles, accounts, payment intangibles, interest, dividends, moneys, instruments, securities and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing, and all proceeds and amounts received or receivable under any or all of the foregoing;

(ii)    substitutions, accessions, additions, parts, accessories, attachments, replacements, Proceeds and products of, for and to any and all of the foregoing, including, without limitation, any and all insurance proceeds, and any and all such substitutions, accessions, additions, parts, accessories, attachments, replacements, Proceeds and products in the form of any of the property described or referenced in (i) above.

All references in this Agreement to the UCC shall mean the Georgia Uniform Commercial Code (the “UCC”), as amended from time to time. All references in this Section 5 to general intangibles, accounts and payment intangibles shall mean those terms as defined in the UCC.

Upon an Event of Default under this Agreement, to the fullest extent permitted by applicable law, PHCC’s rights with respect to the Collateral pledged hereunder include, but are not limited to, the right to: (i) settle and/or compromise any or all of such Collateral; (ii); and (iii)demand, receive and sue, in the Provider’s name at PHCC’s option, for any moneys due or which may become due under such Collateral, or for enforcement of any rights afforded the Provider with respect thereto.

Notwithstanding the foregoing provision, to the fullest extent permitted by applicable law, at any time PHCC’s rights with respect to the Collateral pledged hereunder include, but are not limited to, the right to: (i) do all acts necessary or advisable in furtherance of any rights of PHCC hereunder and

(ii) sign and endorse on behalf of the Provider all checks and instruments received in connection with Collections on the Healthcare Receivables and the Provider hereby irrevocably appoints PHCC the attorney-in-fact of the Provider for such purpose; and the Provider hereby specifically authorizes, ratifies and confirms all that PHCC shall do by virtue hereof; provided, however, that notwithstanding anything to the contrary in this Agreement, the Provider, and not PHCC, shall retain, unless otherwise specified in a court order or an agreement of agency, all rights of collection and endorsement with respect to Governmental Receivables.

The Provider specifically agrees to execute and/or prepare, and file or publish, all at the request and direction of PHCC, and at the Provider’s expense, any and all documentation and/or notices of PHCC’s rights herein as may be necessary or advisable, in PHCC’s discretion, to effect the terms hereof or protect PHCC’s interest herein described. In no event shall PHCC be responsible, in whole or in part, for any duties, performance or obligations of the Provider with respect to the Collateral nor shall the Provider be relieved thereof by reason of this Agreement.

(b)    This Agreement secures the payment and performance by the Provider of all indebtedness, liabilities and obligations now existing or hereafter created or arising under the Note and all renewals, extensions, restructurings and refinancings thereof and all other amounts owing under the Provider Agreements, including, without limitation, any additional indebtedness which may be extended to the Provider pursuant to any restructuring or refinancing of the Provider’s indebtedness thereunder, and including any post-petition interest accruing during any bankruptcy, reorganization or other similar proceeding (collectively, the “Obligations”).

(c)    It is the intent of the parties hereto that the pledge of Collateral and any action taken with respect thereto pursuant to this Agreement shall be in a form and manner sufficient to create a first priority perfected security interest therein for the benefit of PHCC. If, at any time, PHCC’s counsel determines that the procedures necessary to create or perfect such security interest should be modified to enable PHCC’s counsel to deliver an opinion that PHCC’s security interest in the Collateral is a first priority perfected security interest, such procedures shall be modified to enable such opinion to be delivered.

(d)    The Provider hereby authorizes PHCC to file financing statements, continuation statements, and amendments thereto, naming the Provider as debtor and describing, as collateral therein, all Collateral pledged by the Provider pursuant to this Agreement, including specific lists, sublists and types of collateral, and which contain any other information required or permitted by the Uniform Commercial Code, as in effect from time to time in any relevant jurisdiction.

Section 6.    Representations and Warranties of the Provider . The Provider represents and warrants to PHCC that, as of the date hereof, and shall be deemed to represent and warrant to PHCC as of each Advance Request, as follows:

(a)    if a corporation, limited liability company, or partnership, the Provider has been duly organized and is validly existing and in good standing as a corporation, limited liability company or partnership, as the case may be, under the laws of the jurisdiction of its organization and is duly qualified to conduct business in each State in which it conducts business;

(b)    the Provider has full power and authority to own or lease its properties and to conduct its business as presently conducted and to execute, deliver and perform the Provider Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby;

(c)    the execution, delivery and performance by the Provider of the Provider Agreements and all other instruments and documents to be delivered hereunder and the consummation of the transactions contemplated hereby are within the Provider’s powers, have been duly and validly authorized by all requisite action and will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrances upon any of its property or assets pursuant to the terms of, any indenture, mortgage, deed or trust, loan agreement or other agreement or instrument by which it is bound or to which any of its property or assets is subject (except the Provider Agreements) nor will such action result in any violation of the provisions of its organizational documents (including its articles of incorporation and bylaws, operating agreement or partnership agreement, as the case may be) or of any statute or any order, rule or regulation of any court or governmental agency or body of the United States, any state or any political subdivision of either having jurisdiction over it or any of its properties or assets, and no consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any such court or any such regulatory authority or other such governmental agency or body is required to be obtained by or with respect to the Provider in connection with the execution, delivery and performance by the Provider of the Provider Agreements, all other instruments and documents to be delivered thereunder and the consummation of the transactions contemplated thereby, and no transaction contemplated thereby requires compliance with any bulk sales act or similar law;

(d)    no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery and performance by the Provider of the Provider Agreements except for the filing of financing statements under the UCC or the Uniform Commercial Code in effect in any relevant jurisdiction and the giving of notices referred to in Section 2(h)(A), all of which, at the time required in Section 2(h)(A) shall have been duly made and shall be in full force and effect;

(e)    each of the Provider Agreements has been duly and validly authorized, executed and delivered by the Provider and constitutes a valid and legally binding obligation of the Provider, enforceable against the Provider in accordance with its terms, subject to applicable bankruptcy, reorganization, insolvency, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and subject as to enforceability to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law);

(f)    there are no actions, suits, proceedings or investigations pending or, to the knowledge of the Provider, threatened, before any court, administrative agency, arbitrator, governmental body or other tribunal, (i) which, if determined adversely to the Provider, could have a material adverse effect on the business, operations, properties, assets or financial condition of the Provider, (ii) asserting the invalidity of any of the Provider Agreements, (iii) questioning the consummation by the Provider of any of the transactions contemplated by any of the Provider Agreements or (iv) which, if determined adversely, could materially and adversely affect the ability of the Provider to perform its obligations under, or the validity or enforceability of any of the Provider Agreements, Contracts or the Healthcare Receivables;

(g)    the Provider has all necessary permits, licenses, agreements, accreditation, certifications and Governmental Consents to operate and conduct its business, including the provision of all services reflected in and giving rise to each Healthcare Receivable, as it is presently being conducted, subject to minor exceptions and deficiencies which are not material and do not affect the conduct of its business and its ability to own, collect and grant a security interest in the Collateral;

(h)    Exhibit C lists (i) the Provider’s exact legal name, (ii) the Provider’s address for notices, (iii) the address of the chief executive office of the Provider, (iv) the Provider’s State of organization, (v) the location of the office where the Provider keeps all of the tangible Collateral and Records related thereto and to all of the intangible Collateral and (vi) the location, account number and account officer responsible for the Provider’s demand account;

(i)    Except as occurs within the normal course of business, each Contract of the Provider is in full force and effect and has not been amended or otherwise modified, rescinded or revoked or assigned, the Provider is in compliance with the material requirements of the Contracts and no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, would result in the suspension, revocation, impairment, forfeiture or nonrenewal of any Governmental Consent applicable to the Provider or any other health care facility owned or operated by the Provider or such facility’s participation in the Governmental Programs and there is no claim that any such Contract or Governmental Consent is not in full force and effect;

(j)    there has been filed in proper form, or a filing extension from the appropriate governmental authority has been obtained with respect to, all federal, state, and local income, franchise, sales, use, property, excise, payroll and other tax returns and all other reports (whether or not relating to taxes) required by law to be filed by or on behalf of the Provider with any governmental authority. All taxes, fees, assessments and charges of whatsoever nature due or payable by the Provider on or before the date hereof pursuant to said returns or reports or otherwise (including, without limitation, payments of estimated taxes and deposits of taxes withheld by or on behalf of the Provider) have been paid. There is no unpaid interest, penalty or addition to tax due or claimed to be due from, nor any unpaid tax deficiency determination or assessment outstanding against the Provider, nor any basis therefore known to the Provider. No governmental audits or investigations with respect to taxes are, to the Provider’s knowledge, in progress with respect to the Provider, and no governmental authority has given notice that it will begin any such audit or investigation. All returns and reports required to be filed, and all taxes, fees, assessments and charges required to be paid, of whatsoever nature, have been so filed and paid. The Provider has complied in all material respects with all applicable laws relating to the employment of labor, including, without limitation, ERISA and those relating to wages, hours, collective bargaining, unemployment insurance, workers’ compensation, equal employment opportunity and the payment and withholding of taxes, including income and social security taxes, and has withheld (and duly segregated, deposited or paid over to the appropriate authorities) all amounts required by law or agreement to be withheld from the wages or salaries of its employees and is not liable for any arrears of wages or benefits or any taxes or penalties for the Provider’s failure to comply with any of the foregoing;

(k)    the Medicare and Medicaid cost reports of each facility and of the home office of the Provider for all cost reporting periods ending on or before the date hereof have been filed with the appropriate governmental entity, if due, there are no pending or threatened Notice of Program Reimbursements outstanding,   and all prior years’ cost reports have been examined and audited by (i) as to Medicaid, the applicable state agency or other CMS-designated agents or agents of such state agency charged with such responsibility or (ii) as to Medicare, the Medicare intermediary or other CMS-designated agents charged with such responsibility, and have been settled and there are no offsets pending, threatened or now owed by the Provider;

(l)    the Provider has valid provider identification numbers and licenses to generate valid Healthcare Receivables payable by Eligible Obligors;

(m)    the information furnished by or on behalf of the Provider to PHCC and to agents and employees of PHCC prior to the date of this Agreement and during the term of this Agreement or in connection with any transaction contemplated by the Provider Agreements is and will be true and correct in all material respects and does not and will not omit to state a material fact necessary to make the statements contained therein not misleading;

(n)    the Provider is solvent and will not become insolvent after giving effect to the transactions contemplated by the Provider Agreements; the Provider has not incurred debts or liabilities beyond its ability to pay; the Provider will, after giving effect to the transactions contemplated by the Provider Agreements, have an adequate amount of capital to conduct its business in the foreseeable future; and the pledge of the Collateral hereunder is made in good faith and without intent to hinder, delay or defraud present or future creditors of the Provider;

(o)    the Lockbox Account established by the Provider is the only lockbox account into which the Healthcare Receivables are or will be deposited;

(p)    the exact legal name of the Provider is as set forth in Exhibit C to this Agreement. Except as set forth in Exhibit C to this Agreement, the Provider has not changed its name in the last six years and, during such period, the Provider did not use, and the Provider does not now use, any trade names, fictitious names, assumed names or “doing business as” names;

(q)    each pension plan or profit sharing plan to which the Provider is a party has been fully funded in accordance with the obligations of the Provider set forth in such plan;

(r)    the Healthcare Receivables have been, and will continue to be, adjusted to reflect reimbursement policies of the Obligors with respect thereto and the amount thereof will not exceed amounts the Provider is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to the usual charges of the Provider;

(s)    Except within the normal course of business, the Provider is not a party to any unresolved disputes with any Obligor on a Healthcare Receivable, without regard to whether the dispute with an Obligor involves a Healthcare Receivable of the Provider which is pledged to PHCC under this Agreement, except as disclosed in writing to PHCC;

(t)    there are no pending civil or criminal investigations involving the Provider or its officers and directors and neither the Provider nor any of its officers or directors has been involved in, or the subject of, any civil or criminal investigation within the past five years;

(u)    the Provider has executed and delivered to each Obligor a notice showing the Lockbox and Lockbox Account as the only address to which Healthcare Receivable payments and information are to be remitted and has provided a copy of each such notice to PHCC;

(v)    other than, with respect to Governmental Receivables, pursuant to the terms of the CMS in the rules and regulations governing the prospective payment system for healthcare providers or similar governmental programs or regulations, neither the federal government nor any other Person has asserted any claim or right to offset any liability or debt against any Governmental Receivable. Other than, with respect to Governmental Receivables, pursuant to the terms of the CMS in the rules and regulations governing the prospective payment system for healthcare providers or similar governmental programs or regulations, the Provider has no overdue or delinquent liabilities or debt which could give rise to a right of the federal government, any state government or any other Person to offset such liabilities or debt against Governmental Receivables;

(w)    the Provider has heretofore delivered to PHCC true and complete copies o