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Exhibit 10.34
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NORWEST BANK IOWA,
NATIONAL ASSOCIATION CREDIT AGREEMENT
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THIS AGREEMENT (the "Agreement") dated as of December 23, 1999 (the "Effective
Date") is between Norwest Bank Iowa, National Association (the "Bank") and
Patient Infosystems, Inc. (the "Borrower").
BACKGROUND
The Borrower has asked the Bank to provide a line of credit to be used for
general business purposes.
The Bank is agreeable to meeting the Borrower's request, provided that the
Borrower agrees to the terms and conditions of this Agreement. The Revolving
Note, this Agreement, and all "Security Documents" described in Exhibit A may
collectively be referred to as the "Documents."
In consideration of the promises contained in this Agreement, the Borrower and
the Bank agree as follows:
1. LINE OF CREDIT
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 ONE MILLION FIVE HUNDRED THOUSAND DOLLARS AND
00/100 DOLLARS ($1,500,000.00).
1.2 LINE AVAILABILITY PERIOD. The "Line Availability Period" will mean the
period of time from the Effective Date or the date on which all
conditions precedent described in this Agreement have been met,
whichever is earlier, through and including March 31, 2001 (the "Line
Expiration Date").
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 the Effective Date and in form and content
acceptable to the Bank. Reference is made to the Revolving Note for
interest rate and repayment terms.
2. EXPENSES
2.1 ORIGINATION FEE. The Borrower shall pay to the Bank an origination fee
of $2,500.00, which shall be paid at closing, and which shall be deemed
to be earned upon payment by the Borrower.
2.2 DOCUMENTATION EXPENSE. The Borrower agrees to reimburse the Bank for
its reasonable expenses relating to the preparation of the Documents
and any possible future amendments to the Documents, which
reimbursement may include, but shall not be limited to, reimbursement
of reasonable attorneys' fees, including the allocated costs of the
Bank's in-house counsel. Despite such reimbursement the Borrower
acknowledges that the Bank's counsel is engaged solely to represent the
Bank and does not represent the Borrower.
2.3 COLLECTION EXPENSES. In the event the Borrower fails to pay the Bank
any amounts due under this Agreement or under the Documents, the
Borrower will pay all costs of collection, including reasonable
attorneys' fees and legal expenses incurred by the Bank.
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3. DISBURSEMENTS AND PAYMENTS
3.1 REQUESTS FOR ADVANCES. Any Line advance permitted under this Agreement
must be requested by telephone or in a writing delivered to the Bank
(or transmitted via facsimile) by any person reasonably believed by the
Bank to be an authorized officer of the Borrower. The Bank will not
consider any such request if there is an event which is, or with notice
or the lapse of time would be, an event of default under this
Agreement. Proceeds will be deposited into the Borrower's account at
the Bank or disbursed in such other manner as the parties agree.
3.2 INTEREST RATE OPTION BASED ON LIBOR. In addition to interest rates
based on the Base Rate Option defined in the Revolving Note, the
Borrower may elect to fix a rate of interest for an agreed upon period
of time and principal amount agreeable to the Bank and Borrower based
upon the margin stated in the Revolving Note and at an interest rate
derived from the current LIBOR rate available to the Bank on national
or international money markets for a similar time period and dollar
amount.
In order to elect the LIBOR Rate Option, as defined in the Revolving
Note, the Borrower must request a quote from the Bank two days prior to
funding. This request must designate an amount (the "LIBOR Rate
Portion") and a period (the "LIBOR Interest Period"). The LIBOR Rate
Portion must be at least $100,000 and the LIBOR Interest Period will be
for 30, 60 or 90 days or such other period to which the parties may
agree. The Bank shall not be obligated to provide a LIBOR rate quote if
it determines that no deposits with an amount and maturity equal to
those for which a quotation has been requested are available to it in
the London interbank market. The Borrower must orally accept a quote
when received or it will be deemed rejected. If accepted, the LIBOR
Rate Option will remain in effect for the LIBOR Interest Period
specified in the quote. At the end of each LIBOR Interest Period the
principal amount subject to the LIBOR Rate Option shall bear interest
at the Base Rate Option (as defined in the Revolving Note).
3.3 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 day other than a day on which the Bank is open for substantially
all of its business (a "Banking Day", except as otherwise provided),
then the payment shall be made no later than the next Banking Day. For
amounts bearing interest at the LIBOR Rate (if any) a Banking 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.
4. SECURITY
All amounts due under this Agreement and the Documents will be secured
as provided in Exhibit A. The Borrower also hereby grants the Bank a
security interest (independent of the Bank's right of set-off) in its
deposit accounts at the Bank and in any other debt obligations of the
Bank to the Borrower.
5. CONDITIONS PRECEDENT
The Borrower must deliver to the Bank the documents described in
Exhibit A, properly executed and in form and content acceptable to the
Bank, prior to the Bank's initial advance or disbursement under this
Agreement.
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6. REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement, the Borrower, to the
best of its knowledge and upon due inquiry, makes the representations
and warranties contained in Exhibit B. Each request for an advance
under this Agreement constitutes a reaffirmation of these
representations and warranties.
7. COVENANTS
During the time period that credit is available under this Agreement,
and thereafter until all amounts due under the Documents are paid in
full, unless the Bank shall otherwise agree in writing, the Borrower
agrees to:
7.1 FINANCIAL INFORMATION
(a) ANNUAL FINANCIAL STATEMENTS. Provide the Bank within 120 days of the
Borrower's fiscal year end, the Borrower's annual audited financial
statements.
(b) NOTICES. Provide the Bank prompt written notice of (1) any event which
has or might after the passage of time or the giving of notice, or
both, constitute an event of default under the Documents, or (2) any
event that would cause the representations and warranties contained in
this Agreement to be untrue.
(c) ADDITIONAL INFORMATION. Provide the Bank with such other information as
it may reasonably request, and permit the Bank to visit and inspect its
properties and examine its books and records.
7.2 OTHER COVENANTS
(a) NATURE OF BUSINESS. Refrain from engaging in any line of business
materially different from that presently engaged in by the Borrower.
(b) BOOKS AND RECORDS. Maintain adequate books and records and refrain from
making any material changes in its accounting procedures whether for
tax purposes or otherwise.
(c) COMPLIANCE WITH LAWS. Comply in all material respects with all laws
applicable to its business and the ownership of its property.
(d) PRESERVATION OF RIGHTS. Maintain and preserve all rights, privileges,
charters and franchises it now has, excluding sale of assets in the
ordinary course of business and the loss of a management contract with
independent physicians.
These covenants were negotiated by the Bank and Borrower based on
information provided to the Bank by the Borrower. A breach of a
covenant is an indication that the risk of the transaction has
increased. As consideration for any waiver or modification of these
covenants, the Bank may require: additional collateral, guaranties or
other credit support; higher fees or interest rates; and possible
modifications to the Documents and the monitoring of the Agreement. The
waiver or modification of any covenant that has been violated by the
Borrower will be made in the sole discretion of the Bank. These options
do not limit the Bank's right to exercise its rights under Section 8 of
this Agreement.
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8. EVENTS OF DEFAULT AND REMEDIES
8.1 DEFAULT
Upon the occurrence of any one or more of the following events of
default, or at any time afterward unless the default has been cured,
the Bank may declare the Line to be terminated and in its discretion
accelerate and declare the unpaid principal, accrued interest and all
other amounts payable under the Revolving Note to be immediately due
and payable:
(a) Default by the Borrower in the payment when due of any principal or
interest due under the Revolving Note and continuance for twenty (20)
days.
(b) Default by the Borrower in the observance or performance of any
covenant or agreement contained in this Agreement, and continuance for
more than twenty (20) days.
(c) Default by the Borrower in the observance or performance of any
covenant or agreement contained in the Documents, or any of them,
excluding this Agreement, after giving effect to any applicable grace
period.
(d) Default by the Borrower in an amount exceeding $100,000.00 in any
agreement with the Bank or any other lender that relates to
indebtedness or contingent liabilities which would allow the maturity
of such indebtedness to be accelerated.
(e) Any representation or warranty made by the Borrower to the Bank in this
Agreement, or in any financial statement or report submitted to the
Bank by or on behalf of the Borrower or by or on behalf of the
Guarantor before or after the Effective Date is untrue or misleading in
any material respect.
(f) Any litigation or governmental proceeding against the Borrower seeking
an amount that would have a material adverse effect on the Borrower or
the Borrower's operations and which is not insured or subject to
indemnity by a solvent third party either 1) results in a judgment
equal to or in excess of that amount against the Borrower or 2) remains
unresolved on the 270th day following its filing.
(g) A garnishment, levy or writ of attachment, or any local, state, or
federal notice of tax lien or levy is served upon the Bank for the
attachment of property of the Borrower in the Bank's possession or
indebtedness owed to the Borrower by the Bank.
(h) The Guarantor dies or becomes insolvent or is the subject of a
voluntary or involuntary petition under the United States Bankruptcy
Code, or the Guarantor is in default with respect to any liabilities or
indebtedness owed to the Bank which would permit the Bank to accelerate
his indebtedness.
(i) The issuer of any one of the Standby L/Cs described in Exhibit A is
placed into receivership by the FDIC or advises the Bank that it
intends to repudiate its obligations to the Bank under the Standby L/C
issued by it.
8.2 IMMEDIATE DEFAULT
If, with or without the Borrower's consent, a custodian, trustee or
receiver is appointed for any of the Borrower's properties, or if a
petition is filed by or against the Borrower under the United States
Bankruptcy Code, then the Line shall immediately terminate and the
unpaid principal, accrued interest and all other amounts payable under
the Revolving Note and the Documents will become immediately due and
payable without notice or demand.
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9. MISCELLANEOUS
(a) 360 DAY YEAR. All interest and fees due under this Agreement will be
calculated on the basis of actual days elapsed in a 360 day year.
(b) GAAP. Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all calculations for compliance
with financial covenants will be made using generally accepted
accounting principles consistently applied ("GAAP").
(c) NO WAIVER; CUMULATIVE REMEDIES. No failure or delay by the Bank in
exercising any rights under this Agreement shall be deemed a waiver of
those rights. The remedies provided for in the Agreement are cumulative
and not exclusive of any remedies provided by law.
(d) AMENDMENTS OR MODIFICATIONS. Any amendment or modification of this
Agreement must be in writing and signed by the Bank and Borrower. Any
waiver of any provision in this Agreement must be in writing and signed
by the Bank.
(e) BINDING EFFECT: ASSIGNMENT. This Agreement and the Documents are
binding on the successors and assigns of the Borrower and Bank. The
Borrower may not assign its rights under this Agreement and the
Documents without the Bank's prior written consent. The Bank may sell
participations in or assign this Agreement and the Documents and
exchange financial information about the Borrower with actual or
potential participants or assignees.
(f) IOWA LAW. This Agreement and the Documents will be governed by the
substantive laws of the State of Iowa.
(g) SEVERABILITY OF PROVISIONS. If any part of this Agreement or the
Documents are unenforceable, the rest of this Agreement or the
Documents may still be enforced.
(h) INTEGRATION. This Agreement and the Documents describe the entire
understanding and agreement of the parties and supersedes all prior
agreements between the Bank and the Borrower relating to each credit
facility subject to this Agreement, whether verbal or in writing.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERNS 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. BY
SIGNING BELOW THE BORROWER HEREBY ACKNOWLEDGES THAT IT HAS RECEIVED COPIES OF
THIS AGREEMENT AND ALL OTHER DOCUMENTS.
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Address for notices to Bank: Address for notices to Borrower:
Norwest Bank Iowa, Patient Infosystems, Inc.
National Association 00 Xxxxxx Xxxxxx
000 Xxxxxx Xxxxxx, X.X. Xxx 000 Xxxxxxxxx, XX 00000
Xxx Xxxxxx, Xxxx 00000-0000 Attention: /s/ Xxxxxx X. Xxxxxxx
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Attention: Xxxxxxx X. Xxxxxxxx, With a copy to:
Vice President
Xxxx Xxxxxxxxx
c/o Equity Dynamics
2116 Financial Center
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
NORWEST BANK IOWA, By: /s/ Xxxxxx X. Xxxxxxx
NATIONAL ASSOCIATION ----------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx Its: President & CEO
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Xxxxxxx X. Xxxxxxxx, Vice President
PATIENT INFOSYSTEMS, INC.
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EXHIBIT A
CONDITIONS PRECEDENT TO INITIAL ADVANCE
NOTE
The Revolving Note
SECURITY DOCUMENTS
STANDBY LETTERS OF CREDIT. Standby letters of credit (each standby letter of
credit a "Standby L/C") issued by banking institutions acceptable to the Bank
upon the application of each of the following individuals as account party in
the following amount, naming the Bank as beneficiary thereunder: 1) Xxxx
Xxxxxxxxx, $750,000.00; 2) Xxxxxx X. Xxxxxxxx, $750,000. Each Standby L/C will
support the obligations of the Borrower under the Revolving Note.
Each Standby L/C shall bear an expiry date of April 30, 2001, and shall permit
the Bank to draw upon it in an amount equal to the amount of the Standby L/C on
the 20th day following a default by the Borrower under the Revolving Note or at
any time on or after March 31, 2001.
PERSONAL GUARANTY OF XXXX XXXXXXXXX. The unconditional personal Guaranty of Xxxx
Xxxxxxxxx. Pursuant to the Guaranty, the Guarantor guarantees a maximum of
$80,000.00 principal indebtedness, plus accrued interest on the full amount of
the Line, plus collection costs.
SECURITY AGREEMENT OF BORROWER. A Security Agreement signed by the Borrower,
granting the Bank a first lien security interest in the Borrower's accounts,
inventory, equipment and general intangibles described in that Agreement,
together with one or more UCC-1 Financing Statements sufficient to perfect the
security interest granted to the Bank in each jurisdiction where such property
is located.
AUTHORIZATION
CORPORATE CERTIFICATE OF AUTHORITY. A certificate of the Borrower's corporate
secretary as to the incumbency and signatures of the officers of the Borrower
signing the Documents and containing a copy of resolutions of the Borrower's
board of directors authorizing execution of the Documents and performance in
accordance with the terms of the Agreement.
ORGANIZATION
ARTICLES OF INCORPORATION AND BY - LAWS. A certified copy of the Borrower's
Articles of Incorporation and By-Laws and any amendments, if applicable.
CERTIFICATE OF GOOD STANDING. A copy of the Borrower's Certificate of Good
Standing, recently certified by the Delaware Secretary of State.
OTHER
ARBITRATION AGREEMENT. The Bank's standard form of Arbitration Agreement dated
December 23, 1999 signed by the Bank and Borrower, subjecting to binding
arbitration potential controversies between the Bank and Borrower relating to
the Documents and the Agreement, as more fully described in the Arbitration
Agreement.
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EXHIBIT B
REPRESENTATIONS AND WARRANTIES
ORGANIZATIONAL STATUS. The Borrower is a corporation duly formed and in good
standing under the laws of the State of Delaware.
AUTHORIZATION. This Agreement, and the execution and delivery of the Documents
required hereunder, is within the Borrower's powers, has been duly authorized
and does not conflict with any of its organizational documents or any other
agreement by which the Borrower is bound, and has been signed by all persons
authorized and required to do so under its organizational documents.
LITIGATION. There is no litigation or governmental proceeding pending or
threatened against the Borrower which could have a material adverse effect on
the Borrower's financial condition or business, except those disclosed in
Exhibit C attached hereto.
TAXES. The Borrower has paid when due all federal, state and local taxes.
NO DEFAULT. Except as otherwise disclosed to the Bank prior to the date hereof,
there is no event which is, or with notice or the lapse of time would be, an
event of default under this Agreement.
ERISA. The Borrower is in compliance in all material respects with ERISA and has
received no notice to the contrary from the PBGC or other governmental entity.
ENVIRONMENTAL MATTERS. (1) The Borrower is in compliance in all material
respects with all health and environmental laws applicable to the Borrower and
its operations and knows of no conditions or circumstances that could interfere
with such compliance in the future; (2) the Borrower has obtained all
environmental permits and approvals required by law for the operation of its
business; and (3) the Borrower has not identified any "recognized environmental
conditions", as that term is defined by the American Society for Testing and
Materials in its standards for environmental due diligence, which could subject
the Borrower to enforcement action if brought to the attention of appropriate
governmental authorities.
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