On October 15, 2013, Healthcare Corporation of America received a notice of events of default from Partners For Growth III, L.P. (the “Lender”) pursuant to that certain Loan and Security Agreement dated as of July 17, 2013 by and among the company, Healthcare Corporation of America, Prescription Corporation of America, and PCA Benefits, Inc. ("PCAB"; and collectively with the Company, HCA and PCA, the "Borrowers"). Pursuant to the Agreement, the Borrowers borrowed $5,000,000 from the Lender. The Notice alleges that the Borrowers are in default under the Agreement for the following reasons: The failure of the Borrowers to deliver control agreements with respect to the Borrowers' deposit accounts; the occurrence of defaults under certain senior loan agreements; and the events specified above have resulted in a material adverse change with respect to the Borrowers.

The Notice then specifies that the rate of interest under all outstanding obligations is increased to the default rate of 18% and that the Lender is not permitted to fund any additional loans under the Agreement. The aggregate amount outstanding pursuant to the Agreement is $5,000,000. Although the Lender is permitted to request that the Borrowers repay the amounts outstanding immediately if an event of default occurs, the Lender has not demanded such repayment.

The Borrowers are currently negotiating with the Lender regarding the Agreement and the alleged events of default.