THIRD ADDENDUM
TO
CREDIT AGREEMENT
THIS THIRD ADDENDUM to Credit Agreement ("Third Addendum") is made as of the
28th day of December, 2005, by Wells 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, and by a Second
Addendum to Credit Agreement dated August 9, 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 $4,000,000.00 promissory note, dated August 9,
2005 ("Existing Revolving Note").
B. As of December 23, 2005, there is owed on the Existing Revolving Note the
principal amount of Three Million Four Hundred Fifty Thousand Dollars
($3,450,000.00) plus accrued, unpaid interest.
C. The Borrower has requested that the Bank increase the Line to Five Million
Dollars ($5,000,000.00).
D. The Borrower has requested that the Bank extend the Line Availability
Period to March 31, 2007.
E. The Bank and the Borrower wish to amend the Credit Agreement pursuant to
the terms of this Third Addendum.
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein it is agreed:
1. All terms not otherwise defined in this Third Addendum shall have the
meaning given to such term in the Credit Agreement, as amended. The
recital paragraphs are hereby incorporated as though fully set forth in
this Third 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 Third
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.
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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 Third Addendum by the Borrower's secretary of
(i) the resolutions of Borrower's board of directors authorizing the
execution and delivery of this Third Addendum and the Documents
required by this Third 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 Third 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 Third 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 Third 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 date of June 30, 2007:
i) Issued by Manufacturers and Traders Trust Company on account
of Derace L. Schaffer in the amount of $975,000.00; and
ii) Issued by West Bank on account of Matthew P. Kinley in the
amount of $100,000.00.
g) The Bank shall have received from John Pappajohn the (i) Consent to
Third 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).
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i) The Bank shall have received from Derace L. Schaffer the Consent to
Third Addendum of Credit Agreement, Ratification of Guaranty and
Waiver of Claims attached hereto as Exhibit "D" ("Schaffer
Consent").
j) The Bank shall have received from Matthew P. Kinley the Consent to
Third Addendum of Credit Agreement, Ratification of Guaranty and
Waiver of Claims attached hereto as Exhibit "E" ("Kinley Consent").
K) The Borrower shall have reimbursed the Bank for all expenses
incurred by it in connection with this Third Addendum, including but
not limited to, attorney's fees.
3. The Letters of Credit, Pappajohn Consent, Pappajohn Guaranty, Guarantors'
Letter, Schaffer Consent and Kinley Consent are hereinafter deemed to be
included in and a part of the "Security Documents" described in Exhibit A
to the Credit Agreement.
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 FIVE MILLION DOLLARS AND 00/100
DOLLARS ($5,000,000.00).
5. Section 1.2 (Line Availability Period) of the Credit Agreement is hereby
deleted and the following new Section 1.2 is substituted in lieu thereof:
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, 2007 (the
"Line Expiration Date"),
6. The Borrower does hereby release and forever discharge Wells Fargo Bank,
National Association, Wells 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 Third Addendum.
7. Except as modified by this Third Addendum, all the terms and conditions of
the Credit Agreement, as amended, shall remain in full force and effect.
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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 supersedes 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.
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 Third Addendum as of the day
and year first above written.
AMERICAN CARESOURCE HOLDINGS, INC.
By /s/ David S. Boone
--------------------------------
Its CFO & Secretary
--------------------------------
WELLS FARGO BANK, NATIONAL ASSOCIATION
By /s/ Mark E. Conway
---------------------------------
Mark E. Conway, Vice President
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EXHIBIT A
[LOGO] Wells Fargo Bank,
National Association Revolving Note
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$5,000,000.00 December 28, 2005
FOR VALUE RECEIVED, American CareSource Holdings, Inc. (the "Borrower") promises
to pay to the order of Wells 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 FIVE MILLION AND 00/100 DOLLARS
($5,000,000.00), 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 Third 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
January 31, 2006.
Principal. Principal, and any unpaid interest, will be payable in a single
payment due on March 31, 2001.
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 end 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/ David S. Boone
--------------------------------
Its CFO & Secretary
--------------------------------
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