1
EXHIBIT 10.13
UNION BANK OF CALIFORNIA
PROMISSORY NOTE
(BASE RATE)
=================================================================================================================
Borrower Name: Oacis Healthcare Systems, Inc.
- -----------------------------------------------------------------------------------------------------------------
Borrower Address: Office 001 Loan Number
300 Drake's Landing Road, Ste. 1000 -------------------------------------------------------------------------
Greenbrae, CA 94904 Maturity Date: March 15, 2003 Amount
$3,000,000.00
=================================================================================================================
$3,000,000.00 Date: June 2, 1998
FOR VALUE RECEIVED, on March 15, 2003, the undersigned ("Debtor") promises to
pay to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), as indicated below,
the principal sum of Three Million and No/100 Dollars ($3,000,000.00), or so
much thereof as is disbursed, together with interest on the balance of such
principal from time to time outstanding, at the per annum rate or rates and at
the times set forth below.
1. PAYMENTS.
PRINCIPAL PAYMENTS. Debtor shall pay principal in 48 equal consecutive
installments, each installment in an amount sufficient to fully amortize the
principal balance by the final maturity date, beginning April 15, 1999, and
continuing on the 15th day of each consecutive month, until March 15, 2003,
when all principal and interest hereunder shall be due and payable.
INTEREST PAYMENTS. Debtor shall pay interest on the 15th day of each month
(commencing August 15, 1998). Should interest not be paid when due, it shall
become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year
of 360 days, for actual days elapsed.
a. BASE INTEREST RATE. At Debtor's option, amounts outstanding hereunder in
minimum amounts of at least $250,000.00 shall bear interest at a rate,
based on an index to be selected by Debtor, which is 1.250% per annum in
excess of: (i) Bank's Adjusted Treasuries Rate for the interest Period
selected by Debtor, or (ii) Bank's LIBOR Rate for the Interest Period
selected by Debtor, in each case acceptable to Bank.
No Base Interest Rate may be changed, altered or otherwise modified until
the expiration of the Interest Period selected by Debtor. The exercise of
interest rate options by Debtor shall be as recorded in Bank's records,
which records shall be prima facie evidence of the amount borrowed under
either interest option and the interest rate; provided, however, that
failure of Bank to make any such notation in its records shall not
discharge Debtor from its obligations to repay in full with interest all
amounts borrowed. In no event shall any Interest Period extend beyond the
maturity date of this note.
To exercise this option, Debtor may, from time to time with respect to
principal outstanding on which a Base Interest Rate is not accruing, and on
the expiration of any Interest Period with respect to principal outstanding
on which a Base Interest Rate has been accruing, select an index offered by
Bank for a Base Interest Rate Loan and an Interest Period by telephoning an
authorized lending officer of Bank located at the banking office identified
below prior to 10:00 a.m., Pacific time, on any Business Day and advising
that officer of the selected index, the Interest Period and the Origination
Date selected (which Origination Date, for a Base Interest Rate Loan based
on the LIBOR Rate, shall follow the date of such selection by no more than
two (2) Business Days).
Bank will mail a written confirmation of the terms of the selection to
Debtor promptly after the selection is made. Failure to send such
confirmation shall not affect Bank's rights to collect interest at the rate
selected. If, on the date of the selection, the index selected is
unavailable for any reason, the selection shall be void. Bank reserves the
right to fund the principal from any source of funds notwithstanding any
Base Interest Rate selected by Debtor.
b. VARIABLE INTEREST RATE. All principal outstanding hereunder which is not
bearing interest at a Based Interest Rate shall bear interest at a rate per
annum of 0.00% in excess of the Reference Rate, which rate shall vary as
and when the Reference Rate changes.
At any time prior to March 15, 1999, subject to the provisions of paragraph
4, below, of this note, Debtor may borrow and repay hereon so long as the
total outstanding at any one time does not exceed the principal amount of
this note. Debtor shall pay all amounts due under this note in lawful money
of the United States at Bank's San Francisco Business Banking Center, or
such other office as may be designated by Bank, from time to time.
2
2. LATE PAYMENTS. If any payment required by the terms of this note shall remain
unpaid ten days after same is due, at the option of Bank, Debtor shall pay a fee
of $100 to Bank.
3. INTEREST RATE FOLLOWING DEFAULT. IN THE EVENT OF DEFAULT AT THE OPTION OF
Bank, and, to the extent permitted by law, interest shall be payable on the
outstanding principal under this note at a per annum rate equal to five percent
(5%) in excess of the interest rate specified in subparagraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.
4. PREPAYMENT.
a. Amounts outstanding under this note bearing interest at a rate based on
the Reference Rate may be prepaid in whole or in part at any time, without
penalty or premium. Debtor may prepay amounts outstanding under this note
bearing interest at a Base Interest Rate in whole or in part provided
Debtor has given Bank not less than five (5) Business Days prior written
notice of Debtor's intention to make such prepayment and pays to Bank the
liquidated damages due as a result. Liquidated Damages shall also be paid,
if Bank, for any other reason, including acceleration or foreclosure,
receives all or any portion of principal bearing interest at a Base
Interest Rate prior to its scheduled payment date. Liquidated Damages
shall be an amount equal to the present value of the product of: (i) the
difference (but not less than zero) between (a) the Base Interest Rate
applicable to the principal amount which is being prepaid, and (b) the
return which Bank could obtain if it used the amount of such prepayment of
principal to purchase at bid price regularly quoted securities issued by
the United States having a maturity date most closely coinciding with the
relevant Base Rate Maturity Date and such securities were held by Bank
until the relevant Base Rate Maturity Date ("Yield Rate"); (ii) a
fraction, the numerator of which is the number of days in the period
between the date of prepayment and the relevant Base Rate Maturity Date
and the denominator of which is 360; and (iii) the amount of the principal
so prepaid except in the event that principal payments are required and
have been made as scheduled under the terms of the Base Interest Rate Loan
being prepaid, then an amount equal to the lessor of (A) the amount
prepaid or (B) 50% of the sum of (1) the amount prepaid and (2) the amount
of principal scheduled under the terms of the Base Interest Rate Loan
being prepaid to be outstanding at the relevant Base Rate Maturity Date).
Present value under the note is determined by discounting the above
product to present value using the Yield Rate as the annual discount
factor.
b. In no event shall Bank be obligated to make any payment of refund to
Debtor, nor shall Debtor be entitled to any setoff or other claim against
Bank, should the return which Bank could obtain under this prepayment
formula exceed the interest that Bank would have received if no prepayment
had occurred. All prepayments shall include payment of accrued interest on
the principal amount so prepaid and shall be applied to payment of
interest before application to principal. A determination by Bank as to
the prepayment fee amount, if any, shall be conclusive. In the event of
partial prepayment, such prepayments shall be applied to principal
payments in the inverse order of their maturity.
c. Bank shall provide Debtor a statement of the amount payable on account
of prepayment. Debtor acknowledges that (i) Bank establishes a Base
Interest Rate upon the understanding that it apply to the Base Interest
Rate Loan for the entire Interest Period, and (ii) any prepayment may
result in Bank incurring additional costs, expenses and liabilities; and
Debtor agrees to pay these liquidated damages as a reasonable estimate of
the costs, expenses and liabilities of Bank associated with such
prepayment.
5. DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not
be limited to, any of the following: (a) the failure of Debtor to make any
payment required under this note when due; (b) any breach, misrepresentation or
other default by Debtor, any guarantor, co-maker, endorser, or any person or
entity other than Debtor providing security for this note (hereinafter
individually and collectively referred to as the "Obligor") under any security
agreement, guaranty or other agreement between Bank and any Obligor; (c) the
insolvency of any Obligor or the failure of any Obligor generally to pay such
Obligor's debts as such debts become due; (d) the commencement as to any Obligor
of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by any Obligor for the benefit of such Obligor's
creditors; (f) the appointment, or commencement of any proceeding for the
appointment of a receiver, trustee, custodian or similar official for all or
substantially all or any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgement, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) the issuance
against any Obligor, or the property of any Obligor, of any writ of attachment,
execution, or other judicial lien; or (n) the deterioration of the financial
condition of any Obligor which results in Bank deeming itself, in good faith,
insecure. Upon the occurrence of any such default, Bank, in its discretion, may
cease to advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under d, e, f, or g, all principal and interest shall automatically become
immediately due and payable.
6. ADDITIONAL AGREEMENTS OF DEBTOR. If any amounts owing under this note are
not paid when due, Debtor promises to pay all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in the collection or enforcement
of this note. Debtor and any endorsers of this note, for the maximum period of
time and the full extent permitted by law, (a) waive diligence, presentment,
demand, notice of nonpayment, protest, notice of protest, and notice of every
kind; (b) waive the right to assert the defense of any statute of limitations
to any debt or obligation hereunder, and (c) consent to renewals and extensions
of time for the payment of any amounts due under this note. If this note is
signed by more than one party, the term "Debtor" includes each of the
undersigned and any successors in interest thereof; all of whose liability shall
be joint and several. The receipt of any check or other item of payment by
Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank. Bank may delay the credit of such payment based upon Bank's
schedule of funds availability, and interest under this note shall accrue until
the funds are deemed collected. In any action brought under or arising out of
this note, Debtor and any Obligor, including
3
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, except as provided in any
alternative dispute resolution agreement executed between Debtor and Bank, and
consent to service of process by any means authorized by said state's law. The
term "Bank" includes, without limitation, any holder of this note. This note
shall be construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.
7. DEFINITIONS. As used herein, the following terms shall have the meanings
respectively set forth below: "ADJUSTED TREASURIES RATE" means a per annum rate
of interest based on the percentage yield on U.S. Treasury securities, plus a
margin, set by Bank in its discretion, related to the general cost of corporate
borrowing for a term comparable to the term of Bank's loan to Debtor, plus
Bank's costs, including the cost, if any, of reserve requirement and FDIC
assessments. "BASE INTEREST RATE" means a rate of interest based on either the
Adjusted Treasuries Rate or the LIBOR Rate. "BASE INTEREST RATE LOAN" means
amounts outstanding under this note that bear interest at a Base Interest Rate.
"BASE RATE MATURITY DATE" means the last day of the Interest Period with
respect to principal outstanding under a Base Interest Rate loan. "BUSINESS
DAY" means a day on which Bank is open for business for the funding of corporate
loans, and, with respect to the rate of interest based on the LIBOR Rate, on
which dealings in U.S. dollar deposits outside of the United States may be
carried on by Bank. "INTEREST PERIOD" means (i) with respect to funds bearing
interest at a rate based on the Adjusted Treasuries Rate, any period of not
less than 30 nor more than 360 days until March 15, 1999 and not less than 6
months nor more than 48 months up until March 15, 2003, or (ii) with respect to
funds bearing interest at a rate based on the LIBOR Rate, any calendar period
of not less than 30 days nor more than 360 days until March 15, 1999 and not
less than 180 days nor more than 360 days until March 15, 2003. In determining
an Interest Period, a month means a period that starts on one Business Day in a
month and ends on and includes the day preceding the numerically corresponding
day in the next month. For any month in which there is no such numerically
corresponding day, then as to that month, such day shall be deemed to be the
last calendar day of such month. Any Interest Period which would otherwise end
on a non-Business Day shall end on the next succeeding Business Day unless that
is the first day of a month, in which event such Interest Period shall end on
the next preceding Business Day. "LIBOR RATE" means a per annum rate of
interest (rounded upward, if necessary, to the nearest 1/100 of 1%) at which
dollar deposits, in immediately available funds and in lawful money of the
United States would be offered to Bank, outside of the United States, for a
term coinciding with the Interest Period selected by Debtor and for an amount
equal to the amount of principal covered by Debtor's interest rate selection,
plus Bank's costs, including the cost, if any, of reserve requirements.
"ORIGINATION DATE" means the first day of the Interest Period. "REFERENCE RATE"
means the rate announced by Bank from time to time at its corporate headquarters
as its "Reference Rate." The Reference Rate is an index rate determined by Bank
from time to time as a means of pricing certain extensions of credit and is
neither directly tied to any external rate of interest or index nor necessarily
the lowest rate of interest charged by Bank at any given time.
Oacis Healthcare Systems, Inc.
/s/ STEPHEN F. GHIGLIERI
- ---------------------------------------
Stephen F. Ghiglieri
VP Finance & Admin./CFO/Secr.
/s/ JOHN C. KINGERY
- ---------------------------------------
John C. Kingery
President/COO