August 9, 2005
To: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Facility
Guarantors")
Re: American CareSource Holdings, Inc., a Delaware corporation (the "Company")
Revolving Credit Facility
Gentlemen:
▇▇▇▇▇ Fargo Bank, National Association (the "Bank") has agreed to extend a
$4,000,000.00 revolving credit facility (the "Revolving Facility") to American
CareSource Holdings, Inc., a Delaware corporation (the "Company") subject to the
conditions set forth in the Second Addendum to Credit Agreement between the Bank
and the Company, dated August 9, 2005.
At the Company's request, the Facility Guarantors have agreed to provide in
favor of the Bank various guaranty agreements, letters of credit and other
documents (collectively the "Credit Support Arrangements"), in the following
amounts for each respective Facility Guarantors, to secure the performance by
the Company of its obligation to the Bank under the Revolving Facility:
Credit Support Arrangement
--------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Personal Guaranty and authorization to $2,925,000.00
draw on account
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Guaranty and Letter of Credit $ 975,000.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Guaranty and Letter of Credit $ 100,000.00
The Facility Guarantors hereby consent to the Second Addendum to the Credit
Agreement.
If the Bank proceeds against the Credit Support Arrangements and receives
payment in full of the Revolving Facility, the Bank immediately shall assign all
of its rights and remedies under the Revolving Facility and related documents,
including the Bank's collateral documents to the Facility Guarantors. Any such
assignment shall be made by the Bank without recourse and without any
representations or warranties of any kind, except that the Bank owns the
Revolving Facility and related collateral documents and has the right to assign
the same.
The Facility Guarantors
August 9, 2005
Page 2
The liability of the Facility Guarantors under the Credit Support Arrangements
shall not be reduced or impaired by any of the following acts or events (which
the Bank is expressly authorized to do, omit or suffer from time to time,
without notice to or the consent of or approval of the Facility Guarantors): (a)
any acceptance of collateral security, guarantors, accommodation parties or
sureties for the Revolving Facility; (b) any one or more extensions or renewals
of the Revolving Facility (whether or not for a period longer than the original
period) or any modification of the interest rate, maturity or other contractual
terms applicable to all or part of the Revolving Facility; (c) any waiver or
indulgence granted to the Company, any delay or lack of diligence in the
enforcement of the Revolving Facility, or any failure to institute proceedings,
file a claim, give any required notices or otherwise protect the Revolving
Facility; (d) any full or partial release of, settlement with, or agreement not
to sue, the Company or any other Facility Guarantor or other person liable with
respect to the Revolving Facility; (e) any discharge of any evidence of the
Revolving Facility or the acceptance of any instrument renewing or refinancing
the Revolving Facility; (f) any failure to obtain collateral security (including
rights of setoff) for the Revolving Facility, or to assure its proper or
sufficient creation, perfection, or priority, or to protect, insure, or enforce
any collateral security; or any modification, substitution, discharge,
impairment, or loss of such collateral security; (g) any foreclosure or
enforcement of any collateral security by the Bank or any other creditor of the
Company with a security interest in the collateral security; (h) any assignment
or transfer of the Revolving Facility; (i) any order of application of any
payments or credits upon the Revolving Facility from the Company, a Facility
Guarantor or any other person; and (j) any election by the Bank under SS. 1111
(b)(2) of the United States Bankruptcy Code.
The respective agreements of the Bank and the Facility Guarantors stated herein
shall be binding on their respective successors and assigns.
This letter agreement may be executed in one or more identical counterparts,
which, when executed by all parties, shall constitute one and the same document.
This letter agreement and the Credit Support Arrangements 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 letter agreement
or the Credit Support Arrangements 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
The Facility Guarantors
August 9, 2005
Page 3
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.
Please indicate your acceptance of the terms hereof by signing in the
appropriate space below and returning to the undersigned the enclosed duplicate
original of this letter agreement.
Very truly yours,
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
THE FACILITY GUARANTORS;
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------ August 9, 2005
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------ August 9, 2005
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------ August 9, 2005
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇