SECOND ADDENDUM
TO
CREDIT AGREEMENT
THIS SECOND ADDENDUM to Credit Agreement ("Second Addendum") is made as of the
9th day of August, 2005 by Xxxxx Fargo Bank, National Association (the "Bank")
and American CareSource Holdings, Inc. (the "Borrower").
Recitals:
A. The Bank and the Borrower entered into a Credit Agreement, with an
Effective Date of December 1, 2004 ("Credit Agreement"), as amended by a
First Addendum to Credit Agreement dated February 2, 2005, pursuant to
which the Bank made available to the Borrower a $3,000,000.00 revolving
line of credit for general business purposes. Borrowings under the Line
are currently evidenced by a $3,000,000.00 promissory note, dated February
2, 2005 ("Existing Revolving Note").
B. As of August 8, 2005 there is owed on the Existing Revolving Note the
principal amount of $2,480,000 and accrued, unpaid interest in the amount
of $3,366.32.
C. The Borrower has requested that the Bank increase the Line to Four Million
Dollars ($4,000,000.00).
D. The Bank and the Borrower wish to amend the Credit Agreement pursuant to
the terms of this Second Addendum.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein it is agreed:
1. All terms not otherwise defined in this Second Addendum shall have the
meaning given to such term in the Credit Agreement. The recital paragraphs
are hereby incorporated as though fully set forth in this Second Addendum.
2. Notwithstanding the execution of the Credit Agreement or any addendum
thereto, or the delivery of all documents in furtherance thereof, the
obligation of the Bank to make any advance on the Line and this Second
Addendum becoming effective shall be subject to the timely satisfaction of
the following conditions precedent:
a) No event of default or event which will mature into an event of
default, shall have occurred and be continuing.
b) The representations and warranties of the Borrower contained in the
Documents shall be true and correct as of the date of any advance on
the Line.
c) The Borrower shall have delivered to the Bank copies, duly certified
as of the date of this Second Addendum by the Borrowers secretary of
(i) the resolutions
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of Borrower's board of directors authorizing the execution and
delivery of this Second Addendum and the Documents required by this
Second Addendum, (ii) all documents evidencing other necessary
Borrower action, and (iii) all approvals or consents required, if
any, with respect to the Documents.
d) The Borrower shall have delivered to the Bank a certificate of its
secretary certifying the name(s) of the person(s) authorized to sign
this Second Addendum and the Documents, and all other documents and
certificates of the Borrower to be delivered hereunder, together
with the true signatures of such person(s).
e) The Borrower shall have delivered the Documents and the agreements
listed below, each of which shall be in a form and content
satisfactory to the Bank, executed by the parties specified therein,
and all other documents, certificates, opinions and statements
requested by the Bank:
i) This Second Addendum.
ii) The revolving note attached hereto as Exhibit "A" ("New
Revolving Note") which shall evidence the Borrower's
obligation to repay advances made under the Line (as defined
below). Upon this Second Addendum becoming effective, the New
Revolving Note will replace, but not be deemed to satisfy, the
Existing Revolving Note.
f) The Bank shall have received the standby letters of credit
(collectively, the "Letters of Credit") described below, in a form
satisfactory to the Bank, with an expiration dateofAugust3l, 2006:
i) Issued by Manufacturers and Traders Trust Company on account
of Xxxxxx X. Xxxxxxxx in the amount of $975,000.00; and
ii) Issued by West Bank on account of Xxxxxxx X. Xxxxxx in the
amount of $100,000.00.
g) The Bank shall have received from Xxxx Xxxxxxxxx the (i) Consent to
Second Addendum of Credit Agreement, Ratification of Guaranty and
Waiver of Claims attached hereto as Exhibit "B" ("Pappajohn
Consent") and (ii) the guaranty attached to the Pappajohn Consent as
Exhibit "A" ("Pappajohn_Guaranty").
h) The Bank shall have received a letter, in the form attached as
Exhibit "C" (the "Guarantors' Letter"), from all of the Facility
Guarantors (as that term is defined in such letter).
i) The Bank shall have received from Xxxxxx X. Xxxxxxxx the (i) Consent
to Second Addendum of Credit Agreement, Ratification of Guaranty and
Waiver of Claims attached hereto as Exhibit "D" ("Xxxxxxxx Consent")
and (ii) the guaranty attached to the Xxxxxxxx Consent as Exhibit
"A" ("Xxxxxxxx Guaranty").
j) The Bank shall have received from Xxxxxxx X. Xxxxxx the (i)
Acknowledgment, Consent to Second Addendum of Credit Agreement, and
Waiver of Claims attached hereto as Exhibit "E" ("Xxxxxx Consent")
and (ii) the guaranty attached to the Xxxxxx Consent as Exhibit "A"
("Xxxxxx Guaranty").
k) The Borrower shall have reimbursed the Bank for all expenses
incurred by it in connection with this Second Addendum, including
but not limited to, attorney's fees.
3. The Letters of Credit, Pappajohn Consent, Pappajohn Guaranty, Guarantors'
Letter, Xxxxxxxx Consent, Xxxxxxx Guaranty, Xxxxxx Consent and Xxxxxx
Guaranty are hereinafter deemed to be included in and a part of the
"Security Documents" described in Exhibit A to the Credit Agreement.
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4. Section 1.1 (Line Credit Amount) of the Credit Agreement is hereby deleted
and the following new Section 1.1 is substituted in lieu thereof:
1.1 Line of Credit Amount. During the Line Availability Period
defined below, the Bank agrees to provide a revolving line of credit
(the "Line") to the Borrower. Outstanding amounts under the Line
will not, at any one time, exceed FOUR MILLION DOLLARS AND 00/100
DOLLARS ($4,000,000.00).
5. Section 1.3 (Advances) of the Credit Agreement is hereby deleted and the
following new Section 3.1 is substituted in lieu thereof:
1.3 Advances. The Borrower's obligation to repay advances made under
the Line will be evidenced by a single promissory note (the
"Revolving Note") dated as of August 9, 2005. Reference is made to
the Revolving Note for interest rate and repayment terms.
6. Section 3.1 (Requests for Advances) of the Credit Agreement is hereby
deleted and the following new Section 3.1 is substituted in lieu thereof:
3.1 Requests for Advances. Advances hereunder, to the total amount
of the principal sum stated above, may be made by the Bank at the
oral or written request of (i) ______________ or ______________, any
one acting alone, who are authorized to request advances and direct
the disposition of any advances until written notice of the
revocation of such authority is received by the holder at the office
designated above, or (ii) any person, with respect to advances
deposited to the credit of any deposit account of the Borrower,
which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of the Borrower regardless of
the fact that persons other than those authorized to request
advances may have authority to draw against such account. The Bank
shall have no obligation to determine whether any person requesting
an advance is or has been authorized by the Borrower.
7. Section 3.2 (Payments) of the Credit Agreement is hereby deleted and the
following new Section 3.2 is substituted in lieu thereof:
3.2 Payments. All principal, interest and fees due under the
Documents shall be paid in immediately available funds as contracted
in this Agreement and no later than the payment due date set forth
in the statement mailed to the Borrower by the Bank. Should a
payment come due on a Saturday, Sunday or any other day on which
commercial banks in Iowa are authorized or required by law to close
day, then the payment shall be made no later than the next Business
Day. A Business Day means any day except a Saturday, Sunday or any
other day on which commercial banks in Iowa are authorized or
required by law to close. For amounts bearing interest at the LIBOR
Rate (if any) a Business Day is a day on which the Bank is open for
substantially all of its business and on which dealings in U.S.
dollar deposits are carried on in the London interbank market.
8. The Borrower does hereby release and forever discharge Xxxxx Fargo Bank,
National Association, Xxxxx Fargo & Company, and their respective
affiliates and their officers, directors, attorneys, agents, employees,
successors and assigns from all causes of action, suits, claims and
demands of every kind and character, liquidated or unliquidated, fixed,
contingent, direct or indirect without limit, including any action in law
or equity, which the Borrower now has or may ever have had against them,
if the circumstances giving rise to
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such causes of action, suits, claims and demands arose prior to the date
of this Second Addendum.
9. Except as modified by this Second Addendum, all the terms and conditions
of the Credit Agreement, as amended, shall remain in full force and
effect.
10. The Credit Agreement, as amended, embodies the entire agreement and
understanding between the Borrower and the Bank with respect to the
subject matter thereof and supersedes all prior agreements and
understandings among such parties with respect to the subject mailers
thereof.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS OR
ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED.
YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN AGREEMENT.
THIS NOTICE ALSO APPLIES TO ANY OTHER CREDIT AGREEMENTS (EXCEPT CONSUMER LOANS
OR OTHER EXEMPT TRANSACTIONS) NOW IN EFFECT BETWEEN YOU AND THIS LENDER.
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT HE
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT
CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS, WHETHER VERBAL OR WRITTEN, OR ACTIONS OF EITHER
PARTY.
IN WITNESS WHEREOF, the parties have executed this Second Addendum as of the day
and year first above written.
AMERICAN CARESOURCE HOLDINGS, INC.
By /s/ Xxxxx Xxxxx
---------------------------
Its CFO, Secretary & Treasurer
--------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxx, Vice President
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EXHIBIT A
Xxxxx Xxxxx Fargo Bank,
Fargo National Association Revolving Note
================================================================================
$4,000,000.00 August 9, 2005
FOR VALUE RECEIVED. American CareSource Holdings, Inc. (the "Borrower") promises
to pay to the order of Xxxxx Fargo Bank, National Association (the "Bank"), at
its principal office or such other address as the Bank or holder may designate
from time to time, the principal sum of FOUR MILLION AND 00/100 DOLLARS
($4,000,000.00), or the amount shown on the Bank's records to be outstanding,
plus interest (calculated on the basis of actual days elapsed in a 360-day year)
accruing on the unpaid balance at the annual interest rate defined below. Absent
manifest error the Bank's records will be conclusive evidence of the principal
and accrued interest owing hereunder.
This Revolving Note is issued pursuant to a Second Addendum to credit Agreement
of even date herewith between the Bank and the Borrower (the "Agreement"). The
Agreement, and any amendments or substitutions thereto, contain additional terms
and conditions including default and acceleration provisions. The terms of the
Agreement are incorporated into this Revolving Note by reference. Capitalized
terms not expressly defined herein shall have the meanings given them in the
Agreement.
INTEREST RATE
Base Rate. The principal balance outstanding under this Revolving Note will bear
interest at an annual rate equal to the Base Rate, floating (the "Base Rate
Option"). The Base Rate is the "base" or "prime" rate of interest established by
the Bank from time to time at its principal office in Des Moines, Iowa.
REPAYMENT TERMS
Interest. Interest will be payable on the last day of each month, beginning
August31, 2005.
Principal. Principal, and any unpaid interest, will be payable in a single
payment due on July 31, 2006.
ADDITIONAL TERMS AND CONDITIONS. The Borrower agrees to pay all costs of
collection, including reasonable attorneys' fees and legal expenses incurred by
the Bank in the event this Revolving Note is not duly paid. Demand, presentment,
protest and notice of nonpayment and dishonor of this Revolving Note are
expressly waived. This Revolving Note will be governed by the substantive laws
of the State of Iowa.
AMERICAN CARESOURCE HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
---------------------------
Its: CFO, Secretary & Treasurer
--------------------------
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Exhibit B
CONSENT TO SECOND ADDENDUM TO CREDIT AGREEMENT,
RATIFICATION OF GUARANTY AND WAIVER OF CLAIMS
THIS CONSENT TO SECOND ADDENDUM TO CREDIT AGREEMENT, RATIFICATION OF GUARANTY
AND WAIVER OF CLAIMS ("Consent and Ratification") is made by Xxxx Xxxxxxxxx
("Personal Guarantor") and delivered to Xxxxx Fargo Bank, National Association
("Bank") effective as of August 9, 2005.
RECITALS:
A. American CareSource Holdings, Inc. ("Borrower") and the Bank entered into
a Credit Agreement, dated as of December 1, 2004, as amended from time to
time ("Credit Agreement") pursuant to which the Bank has made the Line
available to the Borrower. The Borrower has requested that the Bank
increase the Line, as evidenced by a promissory note, dated August 9,
2005, in the original principal amount of Four Million Dollars
($4,000,000.00) ("New Revolving Note"). In conjunction with the New
Revolving Note, the Borrower and Bank entered into a Second Addendum to
Credit Agreement, dated as of August 9, 2005 (the "Second Addendum").
B. At the Borrower's request, the Personal Guarantor has agreed to (i)
unconditionally guaranty the repayment of the New Revolving Note pursuant
to a written guaranty, dated August 9, 2005, a copy of which is attached
hereto as Exhibit "A" (the "Guaranty") and (ii) authorize the Bank to
make, upon the occurrence of an Event of Default, an advance under the
Personal Guarantor's personal line of credit at the Bank and use the
proceeds of such advance to reduce the Borrowers obligations under the New
Revolving Note.
C. The Bank has agreed to increase the credit amount of the Line in
accordance with the terms of the Second Addendum, provided that all of the
conditions precedent set out in the Second Addendum are satisfied in full,
including, without limitation, the execution and delivery to the Bank of
(i) the Guaranty and (ii) this Consent and Ratification by the Personal
Guarantor.
NOW THEREFORE, the Personal Guarantor agrees:
1. The Recital Paragraphs are incorporated in this Consent and Ratification
as though fully set forth herein. The Personal Guarantor has been provided
with a copy of the New Revolving Note and Second Addendum and acknowledges
receipt of the same.
2. The Personal Guarantor hereby consents to the Second Addendum and the New
Revolving Note.
3. The Guarantor hereby acknowledges that the Guaranty secures the New
Revolving Note, including all extensions, renewals, replacements or
refinancings thereof, which may be owed by the Borrower to the Bank now or
in the future.
4. The Guarantor hereby acknowledges and agrees that his personal line of
credit with the Bank that is evidenced by a promissory note, dated August
9, 2005, in the initial principal amount of $15,000,000.00 (and any
extensions, renewals, replacements or refinancings thereof) ("Guarantor
Line of Credit") will be reduced by Three Million Two Hundred Fifty
Thousand Dollars ($3,250,000.00) to effect the Guarantor's support of the
New Revolving Note and all extensions, renewals, replacements or
refinancings thereof. The Guarantor further agrees that upon (i) a
default by the Borrower under the terms of the Credit Agreement and/or the
New Revolving Note or (ii) the maturity date of the New Revolving Note,
the Bank is hereby authorized to make an advance under the Guarantor Line
of Credit and apply the proceeds of such advance to the New Revolving
Note.
The Guarantor further agrees that in the event the Guarantor Line of
Credit is not renewed or extended upon its expiration or is otherwise
terminated, the Guarantor shall provide to the Bank a standby letter of
credit, or some other form of collateral that would be acceptable to the
Bank in its sole discretion in support of the obligations owed by the
Borrower under the New Revolving Note, issued by a banking institution
acceptable to the Bank in an amount not less than Three Million Dollars
($3,250,000.00), naming the Bank as the beneficiary thereunder.
5. The Guarantor shall, within 150 days of each calendar year end, provide
his current personal financial statement certified as correct and promptly
provide upon filing, a copy of his most recent annual federal income tax
return and all schedules attached to it.
6. Except for "Core Proceedings" under the United States Bankruptcy Code, the
Bank and the Guarantor agree to submit to binding arbitration all claims,
disputes and controversies between or among them, whether in tort,
contract or otherwise (and their respective employees, officers,
directors, attorneys, and other agents) arising out of or relating to in
any way the Guaranty, this Consent and Ratification, the Credit Agreement,
and/or other documents and agreements executed in conjunction therewith
and their negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination. Any arbitration proceeding will (i)
proceed in Des Moines, Iowa; (ii) be governed by the Federal Arbitration
Act (Title 9 of the United States Code); and (iii) be conducted in
accordance with the Commercial Arbitration rules of the American
Arbitration Association ("AAA").
This arbitration requirement does not limit the right of either party to
(i) foreclose against collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or
repossession; or (iii) obtain provisional ancillary remedies such as
replevin, injunctive relief, attachment or the appointment of a receiver,
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before, during or after the pendency or any arbitration proceeding. This
exclusion does not constitute a waiver of the right or obligation of
either party to submit any dispute to arbitration, including those arising
from the exercise of the actions detailed in sections (i), (ii) and (iii)
of this Section.
Any arbitration proceeding will be before a single arbitrator selected
according to the Commercial Arbitration Rules of the AAA. The arbitrator
will be a neutral attorney who has practiced in the area of commercial law
for a minimum of ten years. The arbitrator will determine whether or not
an issue is arbitratable and will give effect to the statutes of
limitation in determining any claim. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
In any arbitration proceeding the arbitrator will decide (by documents
only or with a hearing at the arbitrator's discretion) any pre-hearing
motions which are similar to motions to dismiss for failure to state a
claim or motions for summary adjudication.
In any arbitration proceeding, discovery will be permitted and will be
governed by the Iowa Rules of Civil Procedure. All discovery must be
completed no later than 20 days before the hearing date and within 180
days of the commencement of arbitration proceedings. Any requests for an
extension of the discovery periods, or any discovery disputes, will be
subject to final determination by the arbitrator upon a showing that the
request for discovery is essential for the party's presentation and that
no alternative means for obtaining information is available.
The arbitrator shall award costs and expenses of the arbitration
proceeding in accordance with the provisions of the New Revolving Note.
This Section shall survive the payment of all obligations to the Bank.
7. The Guarantor does hereby release and forever discharge the Bank, Xxxxx
Fargo & Company and their respective affiliates and their officers,
directors, attorneys, agents, employees, successors and assigns from all
causes of action, suits, claims and demands of every kind and character,
liquidated or unliquidated, fixed, contingent, direct or indirect without
limit, including any action in law or equity, which the Guarantor now has
or may ever have had against them, if the circumstances giving rise to
such causes of action, suits, claims and demands (a) are related in any
manner whatsoever to the transactions which are the subject of this
Consent and Ratification and (b) arose prior to the date of this Consent
and Ratification.
8. This Consent and Ratification shall be binding upon and inure to the
benefit of the Guarantor and the Bank and their respective successors and
assigns.
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9. This Consent and Ratification shall be construed in accordance with the
laws of Iowa applicable to contracts performed entirely within the State.
Any action to enforce the provisions of this Consent and Ratification or
arising from the actions of any party in connection therewith, shall be
brought in the United States District Court for the Southern District of
Iowa or in the Iowa District Court in Polk County, Iowa, except such
action as may be necessary by the Bank to protect, preserve and realize
its security interest in collateral located in another jurisdiction.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER
TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE
LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY
ANOTHER WRITTEN AGREEMENT. THIS NOTICE ALSO APPLIES TO ANY OTHER CREDIT
AGREEMENTS (EXCEPT CONSUMER LOANS OR OTHER EXEMPT TRANSACTIONS) NOW IN
EFFECT BETWEEN YOU AND THIS LENDER.
IN WITNESS WHEREOF, this Consent and Ratification was executed effective as of
the day and year first above written.
------------------------
Xxxx Xxxxxxxxx
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