WAIVER AND FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

WAIVER AND FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

WAIVER AND FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT, dated as of November 10, 2015 (this “Amendment”), to the Loan and Security Agreement, dated as of February 28, 2013, as amended by the First Amendment to Loan and Security Agreement dated as of March 28, 2013, the Second Amendment to Loan and Security Agreement dated as of July 9, 2014, the Consent and Third Amendment to Loan and Security Agreement dated as of April 17, 2015, and the Fourth Amendment to Loan and Security Agreement dated as of August 10, 2015 (as amended, the “Loan Agreement”), among ACF XxxXx I LP, as assignee of Keltic Financial Partners II, LP, a Delaware limited partnership (the “Lender”), Accountable Health Solutions, LLC, formerly known as Jefferson Acquisition, LLC, a Kansas limited liability company (“AHS”), and Xxxxxx Xxxxxx, Inc., a New York corporation (together with AHS, the “Borrowers”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Loan Agreement.

W I T N E S S E T H:

WHEREAS, the Borrowers and the Lender are parties to the Loan Agreement, under which the Lender has agreed to make, and has made, Loans and other financial accommodations to the Borrowers on the terms and subject to the conditions set forth therein;

WHEREAS , the Borrowers are required to maintain a minimum amount of EBITDA for, among other periods, the consecutive twelve-month period ended September 30, 2015 (the “Specified EBITDA Requirement”);

WHEREAS, the Borrowers have not meet the Specified EBITDA Requirement, and the Borrowers have asked the Lender to waive the Borrowers’ compliance therewith; and

WHEREAS, the Lender is willing to agree to such waiver, subject to the terms and conditions of this Amendment;

NOW, THEREFORE, the Lender and the Borrowers agree as follows:

SECTION 1.Waiver. Effective as of the date hereof, subject to the terms and conditions hereof, including, without limitation, the satisfaction of the conditions of effectiveness specified in Section 3 hereof, the Lender waives the Borrowers’ failure to comply with the Specified EBITDA Requirement for, and only for, the consecutive twelve-month period ended September 30, 2015 (the “Specified Default”).

SECTION 2. Amendment to the Loan Agreement. Effective as of the date hereof, the definition of “Guarantors” in the Definitions Schedule is amended and restated as follows:

“Guarantors” means Xxxxxx Distribution, Xxxxxx Information Services, Inc., a New Jersey corporation, Mid-America Agency Services, Incorporated, a Nebraska corporation, TEG

Enterprises, Inc., a Nebraska corporation, Xxxxxx Wellness, LLC, a Kansas limited liability company, and Xxxxxx Kit Services, LLC, a Kansas limited liability company.

SECTION 3. Conditions of Effectiveness. This Amendment shall become effective when, and only when, the Lender shall have received each of the following which, in the case of documents, shall be in form and substance satisfactory to the Lender and dated the date hereof or as of an earlier date acceptable to the Lender:

(i) a counterpart of this Amendment, Authenticated by the Borrowers;

(ii) an acknowledgment and consent, in the form of Exhibit A hereto, Authenticated by each of the Guarantors;

(iii) payment of an amendment fee in the amount of $17,500, which shall be deemed fully earned when paid and shall be non-refundable under any circumstance; and

(iv)  payment of the costs and expenses (including, without limitation, attorneys’ fees) incurred by the Lender in connection with the preparation, execution and delivery of this Amendment and the agreements, instruments and documents delivered hereunder.

SECTION 4. Representations and Warranties of the Borrowers. Each of the Borrowers represents and warrants as follows:

(a) No Default or Event of Default has occurred and is continuing other than the Specified Default, and all of the representations set forth in Article 5 of the Loan Agreement and in the other Loan Documents are true and complete as of the date of this Amendment (except any such representation which is as of a specified date, which is accurate and complete as of such date).

(b) The execution, delivery and performance by such Borrower of this Amendment and the agreements, instruments and other documents executed in connection herewith (i) are within such Borrower’s limited liability company or corporate power, (ii) have been duly authorized by all necessary or proper actions of or pertaining to such Borrower (including the consent of managers, members, directors, officers, or shareholders, as applicable), (iii) are not in contravention of (A) any agreement or indenture to which such Borrower is a party or by which such Borrower is bound, (B) such Borrower’s Charter Documents, (C) any provision of law, or (D) any order, writ, judgment, injunction, or decree of any court of competent jurisdiction binding on such Borrower or its property and (iv) do not require the consent or approval of any Governmental Unit or any other Person that has not been obtained and furnished to the Lender.

(c) No authorization, approval or other action by, and no notice to or filing with, any Person is required for the due execution, delivery and performance by such Borrower

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of this Amendment or any of the agreements, instruments and other documents executed in connection herewith.

(d) This Amendment and the Loan Agreement as amended hereby constitute the legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms except as enforceability may be limited by (i) bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) general principles of equity.

SECTION 5. Further Assurances; Additional Equity Capital.

(a) Each of the Borrowers agrees to execute such other and further documents and instruments as the Lender may reasonably request in its discretion to implement the provisions of this Amendment.

(b) On or after the date of this Amendment, the Borrowers shall obtain one or more new equity contributions in an aggregate amount of not less than $4,000,000 of which (i) not less than $1,500,000 shall be received on or before February 28, 2016 and (ii) the balance shall be received on or before June 30, 2016, which amounts shall remain as capital on account of the Equity Interests of the Borrowers, subject to Section 8.7 of the Loan Agreement, it being understood for the avoidance of doubt that the Borrowers’ failure to obtain such new equity contributions by the applicable date shall constitute an Event of Default on such date.

SECTION 6. Reference to and Effect on the Loan Agreement.

(a) On and after the date hereof, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” and words of like import, and each reference in the other Loan Documents to the Loan Agreement, shall mean and be a reference to the Loan Agreement as amended hereby.

(b) Except as specifically waived or amended above, (i) the Loan Agreement and each other Loan Document shall remain in full force and effect and are hereby ratified and confirmed by the parties hereto and (ii) the Lender shall not be deemed to have waived any rights or remedies it may have under the Loan Agreement, any other Loan Document or applicable law.

(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as an amendment to any right, power or remedy of the Lender under any of the Loan Documents, or constitute a waiver of or an amendment to any provision of any of the Loan Documents.

(d) This Amendment constitutes a Loan Document.

SECTION 7. Execution in Counterparts. This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument.

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SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED ENTIRELY IN SUCH STATE WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective general partner or officer thereunto duly authorized, as of the date first above written.

LENDER:

ACF XXXXX I LP, as assignee of Keltic Financial Partners II, LP

By: __/s/ Oleh Szczupak________________

Xxxx Xxxxxxxx

Vice President

BORROWERS:

XXXXXX XXXXXX, INC.

By: /s/Xxxxx X. Xxxxxx         

Xxxxx X. Xxxxxx
President

ACCOUNTABLE HEALTH SOLUTIONS, LLC,

formerly known as Jefferson Acquisition, LLC,

a Kansas limited liability company

By:     /s/ Xxxxx X. Xxxxxx            

Xxxxx X. Xxxxxx    

Chief Executive Officer and President

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EXHIBIT A

ACKNOWLEDGMENT AND CONSENT

Reference is hereby made to (i) the foregoing Waiver and Fifth Amendment to Loan Agreement dated as of November 10, 2015 (the "Amendment") among the Lender and the Borrowers and (ii) the Unconditional and Continuing Guaranty, dated as of February 28, 2013 (as amended, supplemented or otherwise modified from time to time, the “Guaranty”; capitalized terms defined or incorporated by reference therein being used herein as therein defined) by the undersigned Guarantors in favor of the Lender. Each of the undersigned Guarantors hereby (i) acknowledges receipt of a copy of the Amendment, (ii) consents to the terms thereof and (iii) agrees that the terms and provisions thereof shall not affect in any way the obligations and liabilities of such Guarantor under the Guaranty and any other Loan Documents to which it is a party, all of which obligations and liabilities shall remain in full force and effect and each of which is hereby reaffirmed.

GUARANTORS:

XXXXXX DISTRIBUTION SERVICES, LLC

By: Xxxxxx Xxxxxx, Inc., its sole Manager

By: __/s/ Xxxxx X. Dubois__________

Xxxxx X. Xxxxxx

President of Xxxxxx Xxxxxx, Inc.

XXXXXX INFORMATION SERVICES, INC.

By: _/s/ Xxxxx X. Dubois_____________

Xxxxx X. Xxxxxx

President

MID-AMERICA AGENCY SERVICES, INCORPORATED

By: _/s/ Xxxxx X. Dubois___________

Xxxxx X. Xxxxxx

President

TEG ENTERPRISES, INC.

By: _/s/ Xxxxx X. Dubois____________

Xxxxx X. Xxxxxx

President

XXXXXX WELLNESS, LLC

By: _/s/ Xxxxx X. Dubois_____________

Xxxxx X. Xxxxxx

President

XXXXXX KIT SERVICES, LLC, formerly Heritage Labs International, LLC

By: Xxxxxx Xxxxxx, Inc., its Sole Member

By: _/s/ Xxxxx X. Dubois_____________

Xxxxx X. Xxxxxx

President of Xxxxxx Xxxxxx, Inc.

Dated as of November 10, 2015

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