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EXHIBIT 4.04
FORM OF
REVOLVING CREDIT LOAN AGREEMENT
THIS REVOLVING CREDIT LOAN AGREEMENT (the "Agreement"), is made
this ___
day of ________, 2005, by and between U.S. MedSys Corp.
("Borrower"), and
____________ ("Lender").
WHEREAS, Borrower is desirous of borrowing sums from time to
time up to an
aggregate amount of One Hundred Thousand Dollars ($100,000) from
Lender in the
form of a revolving line of credit; and
WHEREAS, Lender is willing to provide the above-described loans
to
Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants
herein contained, the parties agree as follows:
1. Terms of Revolving Credit Facility. Subject to the terms and
conditions
of this Agreement, Lender hereby agrees to establish a revolving
credit facility
(hereinafter, the "Revolving Credit Facility") in the maximum
amount of One
Hundred Thousand Dollars ($100,000) in favor of Borrower on the
following terms
and conditions:
a. The term of the Revolving Credit Facility shall begin on the
date
of this Agreement and shall end on the one year anniversary of
the date of this
Agreement, unless accelerated pursuant to Section 5 hereinbelow
(the
"Termination Date").
b. Advances of funds under the Revolving Credit Facility (each
an
"Advance") may be made, at the discretion of Lender in
accordance with the terms
of this Agreement, at any time prior to the Termination Date
upon receipt by
Lender of written request therefor from Borrower; at no time
shall the aggregate
obligation of Borrower to Lender exceed One Hundred Thousand
Dollars ($100,000).
Each advance shall be due and payable 90 days after the date
that funds for the
advance are received by the Borrower (each a "Repayment Date").
Borrower may at
any time prior to the Repayment Date repay all or any part of
said loans under
the Revolving Credit Facility and subsequently receive further
advances,
consistent with the terms and conditions hereof. All Advances
shall be sent by
wire transfer pursuant to the instructions attached at Exhibit
A.
c. At the time of each Advance, Borrower shall execute and
deliver
to Lender a promissory note (in each instance, the "Note") in
the form attached
hereto as Exhibit B and incorporated by reference herein.
d. The principal amount due for each Advance shall bear
simple
interest at the rate of twelve percent (12%) per annum.
e. Borrower may prepay any Advance at any time in any amount
without
premium or penalty.
f. Amounts borrowed under the Revolving Credit Facility shall
be
used for the purposes specified in Section 9.b. of this
Agreement.
g. As additional consideration for Lender's commitment to
provide
the Revolving Credit Facility, Borrower shall issue to Lender
50,000 shares of
restricted common stock of
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Borrower. Lender is an accredited investor and shall provide to
Borrower
additional written representations and warranties, as are
reasonably requested
by Borrower, to ensure compliance with applicable securities
laws. In an Event
of Default (hereinafter defined), Lender shall have the right to
demand that
Borrower file a registration statement to register the shares
for resale by the
Lender, in the same manner as described in Section 4 below.
2. Fees and Expenses. Borrower agrees to reimburse Lender for
all
out-of-pocket costs and expenses incurred by Lender in
connection with the
protection, enforcement and collection of all amounts advanced
under the
Revolving Credit Facility. These costs are to include all costs
and expenses
incurred in enforcing the rights of Lender under this Agreement
whether or not
upon the occurrence of any Event of Default (hereinafter
defined).
3. Promises to Pay. Borrower promises to pay to Lender when due,
whether
by normal maturity, acceleration or otherwise, the entire
outstanding principal
amount of the Revolving Credit Facility, together with interest,
and all other
amounts payable by Borrower to Lender hereunder, including costs
of collection,
in accordance with the terms of this Agreement and each
Note.
4. Collateral. Borrower shall issue 200,000 shares of restricted
common
stock to be held in escrow as collateral security to ensure
repayment of any
Advances. In an Event of Default (hereinafter defined), Lender
shall have the
right to demand that Borrower file a registration statement to
register the
shares for resale by the Lender. If a registration statement is
not declared
effective within sixty days after demand by Lender, Borrower
shall be liable for
a 10% of the principal amount due as penalty for each 30 day
period thereafter
until effective, up to a maximum of 100%. Upon the effectiveness
of such
registration, the Lender has the right to accept the 200,000
shares as payment
and satisfaction in full of any Advance, Note, principal,
interest, fees and
expenses permitted under the Agreement; and the escrow agent
shall release the
200,000 shares to Lender. If there has been no Event of Default,
then at the
Termination Date, the shares shall be returned to Borrower for
cancellation.
Borrower and Lender shall enter into an escrow agreement with
Joseph Emas, Esq.,
as escrow agent.
5. Events of Default; Acceleration. Any or all of the
liabilities of
Borrower to the Lender in connection with the Revolving Credit
Facility shall,
at the option of Lender, be immediately due and payable upon the
occurrence of
any of the following events of default (each of which shall be
hereinafter
referred to as an "Event of Default"): (a) default in the
payment, when due or
payable, of any obligation of Borrower under this Agreement or
the Note; (b) if
any representation or warranty by Borrower hereunder is not
complete or accurate
at any time that any advances are outstanding hereunder; (c)
failure of Borrower
after request by Lender to permit the inspection of books or
records of
Borrower; (d) issuance of any injunction or of an attachment or
judgment against
any property of Borrower that is not discharged within thirty
(30) days after
issuance; (e) the insolvency of Borrower, or the filing of any
bankruptcy,
reorganization, debt arrangement or other proceeding or case
against Borrower
under any bankruptcy or insolvency law or commencement of any
dissolution or
liquidation proceeding against Borrower, any of which is either
consented to or
acquiesced in by Borrower or remains undismissed for thirty (30)
days after the
date of entry or the commencement by Borrower of a voluntary
case under the
federal bankruptcy laws or any state insolvency or similar laws,
or the consent
by Borrower to the appointment of a receiver, liquidator,
assignee, trustee,
custodian or similar official for Borrower or any of its
property, or the making
by Borrower of any assignment for the benefit of creditors or
the failure by
Borrower generally to pay Borrower's debts, as the case may be,
as they become
due; (f) a change in the condition or affairs (financial or
otherwise) of
Borrower that in the opinion of the Lender increases Lender's
risk in connection
with the Revolving Credit Facility or impairs the
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prospect of timely payment of the Revolving Credit Facility; (g)
default in the
performance of any obligation, covenant or agreement contained
or referred to
herein or in the Note; or (h) failure of a "Condition of
Lending" described
hereinafter in Sec
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