FIRST ADDENDUM
TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
THIS FIRST ADDENDUM to Second Amended and Restated Credit Agreement ("First
Addendum") is made as of the 28th day of June, 2002 by ▇▇▇▇▇ Fargo Bank,
National Association, successor-in-interest to ▇▇▇▇▇ Fargo Bank Iowa, National
Association (the "Bank") and Patient Infosystems, Inc. (the "Borrower").
Recitals:
▇. ▇▇▇▇▇ Fargo Bank Iowa, National Association and the Borrower entered into a
Second Amended and Restated Credit Agreement, with an Effective Date of
March 28, 2002 ("Credit Agreement") pursuant to which the Bank made
available to the Borrower a $2,500,000 revolving line of credit. Borrowings
under the Line are currently evidenced by a $2,500,000.00 promissory note,
dated March 28, 2002 ("Existing Revolving Note").
B. As of June 28, 2002 there is owed on the Existing Revolving Note the
principal amount of $2,500,000.00 and accrued, unpaid interest in the
amount of $16,263.62.
▇. ▇▇▇▇▇ Fargo Bank, National Association now holds the Existing Revolving
Note and the other Documents and is successor-in-interest to ▇▇▇▇▇ Fargo
Bank Iowa, National Association with respect to the Existing Revolving Note
and the other Documents.
D. The Borrower has requested that the Bank increase the Line to Three Million
Dollars ($3,000,000.00).
E. The Bank and the Borrower wish to amend the Credit Agreement pursuant to
the terms of this First Addendum.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein it is agreed:
1. All terms not otherwise defined in this First 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 First 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 First
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 First Addendum by the Borrower's secretary of
(i) the resolutions of Borrower's board of directors authorizing the
execution and delivery of this First Addendum and the Documents
required by this First 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 First 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 First Addendum.
ii) The revolving note attached hereto as Exhibit "A" ("Revolving
Note") which shall evidence the Borrower's obligation to repay
advances made under the Line (as defined below). Upon this First
Addendum becoming effective, the Revolving Note will replace, but
not be deemed to satisfy, the Existing Revolving Note.
f) The Bank shall have received amendments to each Standby L/C described
below, in substantially the form of the attached Exhibit "B", which
changes the name of the beneficiary to "▇▇▇▇▇ Fargo Bank, National
Association, successor-in-interest to ▇▇▇▇▇ Fargo Bank Iowa, National
Association":
i) Issued by West Des Moines State Bank on account of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
in the amount of $750,000;
ii) Issued by Manufacturers and Traders Trust Company on account of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ in the amount of $1,250,000;
g) The Borrower shall have reimbursed the Bank for all expenses incurred
by it in connection with this First Addendum, including but not
limited to, attorney's fees.
h) The Bank shall have received from ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (i) the unconditional
guaranty attached hereto as Exhibit "C" and (ii) the Consent to Second
Amended and Restated Credit Agreement, Ratification of Guaranty and
Waiver of Claims attached hereto as Exhibit "D".
i) The Bank shall have received a letter, in the form attached as Exhibit
"E", from all of the Facility Guarantors (as that term is defined in
such letter).
3. 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 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 THREE MILLION DOLLARS AND 00/100 DOLLARS ($3,000,000.00).
4. Section 3.2 of the Credit Agreement is hereby deleted and the following new
Section 3.2 is substituted in lieu thereof:
3.2 Interest Rate Option Based on LIBOR. In addition to interest rates
based on the Prime Rate Option defined in the Revolving Note, as
amended, 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 Prime Rate Option (as defined in the Revolving Note).
5. All references to the "Bank" in the Credit Agreement shall mean ▇▇▇▇▇ Fargo
Bank, National Association.
6. The Borrower does hereby release and forever discharge the ▇▇▇▇▇ Fargo
Bank, National Association, ▇▇▇▇▇ Fargo Bank Iowa, National Association,
▇▇▇▇▇ 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 such
causes of action, suits, claims and demands arose prior to the date of this
First Addendum.
7. Except as modified by this First Addendum, all the terms and conditions of
the Credit Agreement, as amended, shall remain in full force and effect.
8. 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 supercedes all prior agreements and understandings among
such parties with respect to the subject matters 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.
IN WITNESS WHEREOF, the parties have executed this First Addendum as of the day
and year first above written.
PATIENT INFOSYSTEMS, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its:Vice President
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▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
▇▇▇▇▇ Fargo Bank,
National Association Revolving Note
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$3,000,000.00 June 28, 2002
FOR VALUE RECEIVED, Patient Infosystems, Inc. (the "Borrower") promises to pay
to the order of ▇▇▇▇▇ 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 THREE MILLION and 00/100 Dollars
($3,000,000.00), 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 Amended and Restated Credit
Agreement, with an Effective Date of March 28, 2002, between the Bank and the
Borrower, as amended (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
Prime Rate Option. Unless the Borrower chooses the LIBOR Rate Option as defined
below, the principal balance outstanding under this Revolving Note will bear
interest (computed on the basis of a 360-day year, actual days elapsed) at an
annual rate equal to the Prime Rate in effect from time to time (the "Prime Rate
Option"). The "Prime Rate" is a base rate that the Bank from time to time
establishes and which serves as the basis upon which effective rates of interest
are calculated for those loans making reference thereto. Each change in the rate
of interest hereunder shall become effective on the date each Prime Rate change
is announced within the Bank.
LIBOR Rate Option. Subject to the terms and conditions of the Agreement the
Borrower may elect that all or portions of the principal balance of this
Revolving Note bear interest at the LIBOR Rate plus 1.75% (the "LIBOR Rate
Option"). Specific reference is made to the Section 3 of the Agreement for terms
governing the designation of interest periods and rate portions.
The LIBOR Rate will be computed in accordance with the following formula.
LIBOR Rate = London Interbank Rate
-------------------------
1.00 - Reserve Percentage
Where,
(1) "London Interbank Rate" means the average rate at which U.S.
Dollar deposits with a term equal to the applicable LIBOR
Interest Period and in an amount equal to the LIBOR Rate Portion
are offered to the Bank on the London Interbank Market.
(2) "Reserve Percentage" means the Federal Reserve System requirement
(expressed as a percentage) applicable to the dollar deposits
used in calculating the LIBOR Rate above.
REPAYMENT TERMS
Interest. Interest will be payable on the last day of each month, beginning
March 31, 2002. Interest accruing under the LIBOR Rate Option will be payable at
the end of the respective LIBOR Interest Period or the last day of each month,
whichever is earlier.
Principal.
Principal, and any unpaid interest, will be payable in a single payment due
on March 31, 2003.
Prepayment Fee.
Each prepayment of principal amounts bearing interest under the LIBOR Rate
Option, whether voluntary or by reason of acceleration, will be accompanied by
accrued interest on the amount prepaid plus a prepayment fee equal to the
amount, if any, by which:
(1) the additional interest that would have been payable on the
amount prepaid if it had not been paid until the last day of the
applicable interest period, exceeds
(2) the interest that would have been recoverable by the Bank by
reinvesting the amount prepaid from the prepayment date to the
last day of the applicable interest period in U.S. Government
Securities having a maturity date on or about that date.
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.
Patient Infosystems, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Vice President
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