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EXHIBIT 4.3
SIXTH AMENDMENT TO REVOLVING CREDIT AND LOAN AGREEMENT
THIS SIXTH AMENDMENT TO REVOLVING CREDIT AND LOAN AGREEMENT (this
"Sixth Amendment to Loan Agreement" or this "Sixth Amendment") is entered
into on August 3, 1998 between NBD Bank ("NBD" or "Bank"), as lender, with
offices at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000; Universal Standard
Healthcare, Inc., formerly known as Universal Standard Medical
Laboratories, Inc., a Michigan corporation ("USML"); Universal Standard
Healthcare of Michigan, Inc., formerly known as Universal Standard Managed
Care of Michigan, Inc., a Michigan corporation ("Michigan Managed Care");
Universal Standard Healthcare of Ohio, Inc., formerly known as Universal
Standard Managed Care of Ohio, Inc., an Ohio corporation ("Ohio Managed
Care"); Universal Standard Healthcare of Delaware, Inc., formerly known as
Universal Standard Managed Care, Inc., a Delaware corporation ("Delaware
Managed Care"); T.P.A., Inc., a Michigan corporation ("Processing"); and A/R
Credit, Inc., a Michigan corporation ("AR Credit"), all of whose addresses are
00000 Xxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
RECITALS
This Sixth Amendment to Loan Agreement is based on the following
recitals ("Recitals"), which are incorporated into and made a part of this
Sixth Amendment:
1. USML, Delaware Managed Care, Ohio Managed Care,
Michigan Managed Care, Processing, AR Credit (each, an "Obligor" and
collectively, the "Obligors"), and NBD are parties to a Revolving
Credit and Loan Agreement dated April 30, 1997, as amended by a First
Amendment to Revolving Credit and Loan Agreement dated September 26,
1997, by a Second Amendment to Revolving Credit and Loan Agreement
dated November 30, 1997, by a Third Amendment to Revolving Credit and
Loan Agreement dated February 2, 1998, by a Fourth Amendment to
Revolving Credit and Loan Agreement dated March 12, 1998, by a Fifth
Amendment to Revolving Credit and Loan Agreement dated June 5, 1998,
and by a letter agreement dated July 21, 1998 (as amended, and as may
be further amended or restated from time to time, the " Loan
Agreement"). In addition to the Loan Agreement, Bank and Obligors are
parties to various other loan and security documents and guaranties
more particularly described in or executed in connection with the Loan
Agreement (which are defined as the "Loan Documents" in the Loan
Agreement). Capitalized terms used but not defined in this Sixth
Amendment have the same meanings given to those terms in the Loan
Documents.
2. USML has advised NBD that simultaneously with the
execution of this Sixth Amendment it will enter into the following
agreements with Laboratory Corporation of America Holdings, a
Delaware corporation ("Labcorp"): (1) Co-Marketing Agreement,
Purchase Agreement, Universal Standard Healthcare, Inc. Stock Purchase
Agreement, and a Security Agreement (to which Delaware Managed Care is
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also a party) [for convenience, the foregoing agreements, together
with all other documents, instruments, and agreements enter into in
connection with these agreements are referred to collectively as the
"Labcorp Documents" and individually as a "Labcorp Document"].
Obligors represent and warrant that true, correct, and complete
copies of all of the Labcorp Documents have been provided to NBD.
Among other provisions, the Labcorp Documents provide that Labcorp
will purchase USML's laboratory customer list and certain equipment
located at the so-called "off site patient servicing centers" for
$9,000,000, Labcorp will purchase $4,250,000 of common stock of USML,
and that Labcorp will lease certain premises and certain machinery and
equipment until December 31, 1998 for a lease payment of $1,850,000.
In addition, under the Co-Marketing Agreement, USML may be required to
pay the termination fee described in paragraph 10 of that agreement
(the "Co-Marketing Termination Fee"). The transactions described in
the Labcorp Documents are referred to as the "Labcorp Transaction".
3. Obligors have requested and, subject to the terms
hereof, Bank has agreed to amend the Loan Agreement as set forth in
this Sixth Amendment.
AGREEMENT
Based on the foregoing Recitals (which are incorporated herein as
representations, warranties, acknowledgments and agreements of the parties,
as the case may be) and for other good and valuable consideration, the
receipt and adequacy of which is mutually acknowledged by the parties hereto,
Obligors and Bank agree as follows:
A. The Line of Credit contained in the Loan Agreement
is terminated and no further Advances will be made thereunder.
Simultaneously with the execution of this Sixth Amendment, except for
the Remaining Obligations, all of each Obligor's Obligations to NBD
must be paid in full including, without limitation, all obligations
outstanding under the Line of Credit, all Obligations outstanding with
respect to the Term Loan, and all interest, fees, and costs due NBD.
"Remaining Obligations" means Standby Letters of Credit issued under
Section 2.3 of the Loan Agreement, the Litigation Letter of Credit, and
the Lease Transactions.
B. Section 6.1 of the Loan Agreement is amended in its
entirety to read as follows:
"6.1 Financial Status. Maintain at all times Consolidated
Tangible Capital Funds of not less than $12,500,000 minus the
Laboratory Special Charge. "Laboratory Special Charge" means
up to the first $5,000,000 of any special charge taken by
Obligors due to the sale of USML's laboratory division, but
excluding, without limitation, a charge or
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reduction to net worth in connection with the Co-Marketing
Termination Fee. "Consolidated Tangible Capital Funds" means
the sum of Consolidated Tangible Net Worth plus that
portion of Obligors' Consolidated Indebtedness (but
excluding the Co- Marketing Termination Fee) that is
subordinated to the Obligations in a written agreement on
terms and conditions satisfactory to NBD in its sole
discretion. A calculation of the Obligors' Consolidated
Tangible Capital Funds is attached to the Sixth Amendment as
Exhibit A."
C. Article VII of the Loan Agreement is amended to
provide that in addition to the Events of Default listed therein, the
occurrence of any of the following events or conditions constitute
Events of Default under the Loan Documents for which there is no cure
period:
(1) If any Obligor becomes obligated to pay all
or any portion of the Co-Marketing Termination Fee and within
30 days of its due date does not provide to NBD evidence
satisfactory to NBD in its sole discretion that the
Obligors will be able to pay the Co-Marketing Termination Fee
without causing an Event of Default under the Loan Agreement.
(2) If Labcorp or any Obligor breaches any term,
condition, or provision of the Subordination Agreement (the
"Labcorp Subordination Agreement") entered into between
NBD and Labcorp on or about the same date as this Sixth
Amendment.
D. All proceeds from the sale of the equipment related
to USML's discontinued laboratory operations and all proceeds from the
sale of any other Collateral must be immediately delivered to NBD in
the form received and deposited into a cash collateral account (the
"Cash Collateral Account") at NBD until such time as the amount in the
Cash Collateral Account equals 105% of the sum of (a) the face amount
of all letters of credit (including, without limitation, Standby
Letters of Credit issued under Section 2.3 of the Loan Agreement and
the Litigation Letter of Credit) issued by NBD for the account of any
Obligor, plus (b) any outstanding loans or advances, plus (c) the
maximum amount due under the Lease Transactions, plus (d) the amount
of the other Obligations. For convenience, the sum of subparagraphs
(a), (b), (c) and (d) is referred to collectively as the " Cash
Collateral Amount". All funds in the Cash Collateral Account are
additional collateral security for all of each Obligor's Obligations
to NBD.
E. In addition to any other of NBD's rights and remedies
provided in the Loan Documents, immediately upon the occurrence of an
Event of Default the Obligors must deposit the Letter of Credit Amount
into a cash collateral account (the " Letter of
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Credit Cash Collateral Account") at NBD. All funds in the Letter of
Credit Cash Collateral Account are additional collateral security for
all of each Obligor's Obligations to NBD. "Letter of Credit Amount"
means an amount equal to 105% of the Cash Collateral Amount, less
amounts in the Cash Collateral Account.
F. The warrant agreement (the "Old Warrant Agreement")
constituting part of the Warrant Documents is amended and restated in
its entirety by the warrant agreement attached to this Sixth Amendment
as Exhibit B (the "New Warrant Agreement"), which New Warrant
Agreement now constitutes a part of the Warrant Documents. Within five
business days of NBD's receipt of the New Warrant Agreement, NBD must
deliver the original Old Warrant Agreement to USML for cancellation.
G. NBD waives through August 14, 1998 the default under
the Loan Documents due to the Obligors' failure to deliver to NBD the
Managed Care Reports.
H. To the extent required under the Loan Documents,
NBD consents to the Labcorp Transaction provided that NBD receives
the payments required to be paid to NBD under this Sixth Amendment,
which are $11,377,335.22 as of August 4, 1998. Notwithstanding the
immediately preceding sentence, NBD's consent does not waive any
rights or privileges that NBD has or may have under the Labcorp
Subordination Agreement.
I. Prior to the date of this Sixth Amendment and while
the Obligors were negotiating the Labcorp Transaction, NBD honored
certain overdrafts. On and after the date of the Sixth Amendment, no
further overdrafts will be allowed and NBD may return any checks or
other items presented against any Obligor's account at NBD in which
there are insufficient available and collected funds to cover such
checks or items.
J. Within 60 days after the date of this Agreement, NBD
and the Obligors agree to meet to discuss and attempt to agree on
amending and setting financial covenants through the latest maturity
date of any of the Loans. If for any reason NBD and the Obligors are
unable to agree on the amended and reset financial covenants within
the 60 day period referred to in the immediately preceding sentence,
then such event constitutes an Event of Default under all of the Loan
Documents for which there is no cure period.
K. The Labcorp documents may not be amended without
NBD's prior written consent.
L. Obligors must give simultaneous notice to NBD at the
address in the Loan Agreement of any notices, correspondence, or other
communication regarding the
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Co-Marketing Agreement (other than usual and customary business
communications) or the Co-Marketing Termination Fee including, without
limitation, any of the foregoing relating to facts and circumstances
under which the Co-Marketing Termination Fee may become payable.
M. Obligors must pay the Collateral Monitoring Fee
through the period ended September 30, 1998, but thereafter the
Collateral Monitoring Fee is no longer payable.
N. From and after the date of this Sixth Amendment,
references in the Loan Documents (i) to the "Loan Agreement" are to be
treated as referring to the Loan Agreement as amended by this Sixth
Amendment; (ii) to "obligations" and "Obligations" are to be treated
as referring to all indebtedness and obligations referred to in this
Sixth Amendment; and (iii) to "Loan Documents" includes, without
limitation, the Warrant Documents.
O. Prior to or simultaneously with execution and
delivery of this Sixth Amendment, Obligors must cause to be executed
and delivered to Bank such financing statements, resolutions and other
agreements that Bank may require to effectuate the transactions
contemplated by this Sixth Amendment. Obligors must pay all costs and
expenses (including attorneys' fees) incurred by Bank in connection
with this Sixth Amendment.
P. Obligors expressly acknowledge and agree that all
collateral security and security interests, liens, pledges,
guaranties, and mortgages heretofore or hereafter granted Bank
including, without limitation, such collateral, security interests,
liens, pledges, and mortgages granted under the Loan Documents, extend
to and cover all of each Obligor's Obligations to Bank, now existing
or hereafter arising including, without limitation, those arising in
connection with this Sixth Amendment and under all guaranty agreements
now or in the future given by one or more of the Obligors in Bank's
favor, upon the terms set forth in such agreements, all of which
security interests, liens, pledges, and mortgages are ratified,
reaffirmed, confirmed and approved.
Q. Obligors represent and warrant to NBD that:
(1) (a) The execution, delivery and
performance of this Sixth Amendment by the Obligors and all
agreements and documents delivered by Obligors in connection
with this Sixth Amendment have been duly authorized by all
necessary corporate or other organizational action and does
not and will not require any consent or approval of its
stockholders or members, violate any provision of any law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect having
applicability to it or of its
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articles of incorporation, articles of organization, or
bylaws, or result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Obligor is a party
or by which it or its properties may be bound or affected.
(b) No authorization, consent, approval,
license, exemption of or filing a registration with any court
or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, is or will be
necessary to the valid execution, delivery or performance by
Obligors of this Sixth Amendment and all agreements and
documents delivered in connection with this Sixth Amendment.
(c) This Sixth Amendment and all
agreements and documents delivered by Obligors in connection
with this Sixth Amendment are the legal, valid and binding
obligations of Obligors enforceable against each of them in
accordance with the terms thereof.
(2) After giving effect to the amendments
contained in this Sixth Amendment, except as set forth on
Exhibit C, all of the representations and warranties contained
in the Loan Documents (other than in Section 4.16 of the Loan
Agreement) are true and correct on and as of the date hereof
with the same force and effect as if made on and as of the
date hereof.
(3) Obligors's financial statements furnished to
NBD, fairly present Obligors's financial condition as at such
dates and the results of Obligors's operations for the periods
indicated, all in accordance with generally accepted
accounting principles applied on a consistent basis, and since
the date of the last such financial statement there has been
no material adverse change in such financial condition.
(4) After giving effect to this Sixth Amendment
no Default or Event of Default has occurred and is continuing
or will exist on the date of this Sixth Amendment under the
Loan Agreement or any of the other Loan Documents.
R. The terms and provisions of this Sixth Amendment
amend, add to and constitute a part of the Loan Agreement. Except as
expressly modified and amended by the terms of this Sixth Amendment,
all of the other terms and conditions of the Loan Agreement and the
other Loan Documents (including all guaranties, which, without
limitation, extend to and cover the Obligations arising in connection
with the Lease Transactions and the Lease Documents) remain in full
force and effect and are hereby ratified, reaffirmed, confirmed, and
approved.
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S. If there is an express conflict between the terms of
this Sixth Amendment to Loan Agreement and the terms of the Loan
Agreement or the other Loan Documents, the terms of this Sixth
Amendment govern and control.
T. This Sixth Amendment may be executed in any number of
counterparts with the same effect as if all signatories had signed the
same document. All counterparts must be construed together to
constitute one instrument.
U. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
V. There are no promises or inducements which have been
made to any signatory hereto to cause such signatory to enter into
this Sixth Amendment other than those which are set forth in this
Sixth Amendment.
W . RELEASE. AS OF THE DATE HEREOF EACH OBLIGOR
REPRESENTS AND WARRANTS THAT IT IS UNAWARE OF, AND POSSESSES, NO
CLAIMS OR CAUSES OF ACTION AGAINST NBD. NOTWITHSTANDING THIS
REPRESENTATION AND AS FURTHER CONSIDERATION FOR THE AGREEMENTS AND
UNDERSTANDINGS HEREIN, EACH OBLIGOR INDIVIDUALLY, JOINTLY, SEVERALLY,
AND JOINTLY AND SEVERALLY, EACH OF THEIR EMPLOYEES, AGENTS, EXECUTORS
(TO THE EXTENT PERMITTED BY APPLICABLE LAW WITH RESPECT TO EMPLOYEES,
AGENTS, AND EXECUTORS), SUCCESSORS AND ASSIGNS HEREBY RELEASE NBD, ITS
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AFFILIATES,
SUBSIDIARIES, SUCCESSORS AND ASSIGNS FROM ANY LIABILITY, CLAIM, RIGHT
OR CAUSE OF ACTION WHICH NOW EXISTS, OR HEREAFTER ARISES, WHETHER
KNOWN OR UNKNOWN, ARISING FROM OR IN ANY WAY RELATED TO FACTS IN
EXISTENCE AS OF THE DATE HEREOF. BY WAY OF EXAMPLE AND NOT
LIMITATION, THE FORGOING INCLUDES ANY CLAIMS IN ANY WAY RELATED TO
ACTIONS TAKEN OR OMITTED TO BE TAKEN BY NBD UNDER THE LOAN DOCUMENTS,
AND THE BUSINESS RELATIONSHIP WITH NBD.
X. WAIVER OF JURY TRIAL AND ACKNOWLEDGMENT. THE PARTIES
HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. NBD AND OBLIGORS EACH
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HEREBY KNOWINGLY, VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS
TO A TRIAL BY JURY OF ALL DISPUTES ARISING OUT OF OR IN RELATION TO
THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENTS BETWEEN ANY
OF THE PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE
BENEFIT OF THIS WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN
A WRITTEN INSTRUMENT SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT
WILL BE CHARGED.
NBD BANK
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxx
First Vice President
UNIVERSAL STANDARD
HEALTHCARE, INC.
By: /s/ Xxxx X. Xxx
---------------------------------------------
Xxxx X. Xxx
Vice President Finance and Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF MICHIGAN, INC.
By: /s/ Xxxx X. Xxx
---------------------------------------------
Xxxx X. Xxx, Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF OHIO, INC.
By: /s/ Xxxx X. Xxx
---------------------------------------------
Xxxx X. Xxx, Treasurer
[Signatures continued
on the following page]
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[Signatures continued
from preceding page]
UNIVERSAL STANDARD HEALTHCARE
OF DELAWARE, INC.
By: /s/ Xxxx X. Xxx
-------------------------------------
Xxxx X. Xxx, Treasurer
A/R CREDIT, INC.
By: /s/ Xxxx X. Xxx
-------------------------------------
Xxxx X. Xxx, Treasurer
T.P.A., INC.
By: /s/ Xxxx X. Xxx
-------------------------------------
Xxxx X. Xxx, Treasurer
Exhibit A Calculation of Consolidated Tangible Capital Funds
B Amended and Restated Warrant Agreement
C Disclosure re certain Representations and Warranties
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