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EXHIBIT 4.2(L)
EIGHTH AMENDMENT TO REVOLVING CREDIT AND LOAN AGREEMENT
THIS EIGHTH AMENDMENT TO REVOLVING CREDIT AND LOAN AGREEMENT (this
"Eighth Amendment to Loan Agreement" or this "Eighth Amendment") is entered into
as of January 25, 1999 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"); Universal Standard
Healthcare of Florida, Inc. ("Florida 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 Eighth Amendment to Loan Agreement is based on the following
recitals ("Recitals"), which are incorporated into and made a part of this
Eighth Amendment:
1. USML, Delaware Managed Care, Ohio Managed Care, Michigan
Managed Care, Florida 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, by
a letter agreement dated July 21, 1998, by a Sixth Amendment to
Revolving Credit and Loan Agreement dated August 3, 1998, by a letter
agreement dated October 8, 1998, and by a Seventh Amendment to
Revolving Credit and Loan Agreement dated January 4, 1999 (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 Eighth
Amendment have the same meanings given to those terms in the Loan
Documents.
2. Simultaneously with the execution of the Sixth Amendment
USML entered into the Labcorp Transaction.
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3. Xxxxxxx X. Xxxxxxxx ("Xx. Xxxxxxxx") of NBD's Managed Asset
Group was recently introduced to the Obligors as the new account
officer on Obligors' account because of NBD's concerns, among others,
about Obligors' cash flow issues and the overdrafts on Obligors'
accounts. Xx. Xxxxxxxx'x involvement is to evaluate the Obligors'
controls, performance, direction, and NBD's continued involvement. In
order to achieve that purpose, it is necessary that we conduct certain
investigations and review certain financial data regarding the Obligors
4. At a meeting on January 20, 1999, NBD and the Obligors met
to discuss the situation. At this meeting Obligors advised that they
would promptly hire a financial consultant reasonably acceptable to NBD
(the "Obligors' Consultant") to assist the Obligors with their cash
flow issues.
5. Obligors have requested and, subject to the terms hereof,
Bank has agreed to amend the Loan Agreement as set forth in this Eighth
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 Obligors acknowledge and agree that on January 22,
1999 there was $4,999,107.32 in principal owing by Obligors to NBD under the
Loan Documents as follows:
1. $983,000 owing under the Line of Credit Note,
2. $621,764 owing under the Lease Transactions,
3. $2,378,000 in contingent indebtedness owing
under the letters of credit issued under
Section 2.3 of the Loan Agreement, and
4. $1,016,343.32 in contingent indebtedness owing under
the Litigation Letter of Credit,
plus accrued but unpaid interest, costs and expenses (including
attorneys' fees and consultant fees) called for by the Loan Documents
(all such obligations together with all other principal and interest
due or becoming due to NBD), together with the payment of all other
sums, indebtedness and liabilities of any and every kind now or
hereafter owing and to become due from the Obligors to NBD, however
created, however incurred,
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evidenced, acquired or arising, and whether direct or indirect,
primary, secondary, fixed or contingent, matured or unmatured, joint,
several, or joint and several, and whether for principal, interest,
reimbursement obligations, indemnity obligations, obligations under
guaranty agreements, fees, costs, expenses, or otherwise, all of the
Obligors' obligations under this Eighth Amendment, together with all
other present and future obligations of the Obligors to NBD, including
the "Obligations" as defined in the Loan Agreement, are referred to
collectively as the "Obligations". The Obligors acknowledge and agree
that the Obligations and all other obligations of Obligors to NBD are
owing to NBD without setoff, recoupment, defense or counterclaim, in
law or in equity, of any nature or kind.
B. The Obligors' Consultant must prepare and deliver a
preliminary oral report to NBD by January 29, 1999. Obligors agree that
they alone are responsible for the cost of the retention and use of the
Obligors' Consultant.
X. Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, may engage a consultant
("NBD's Consultant") to, among other things, assist in reviewing
certain financial data regarding the Obligors, including Obligors'
cash flow shortfalls, and the Obligors agree to cooperate fully with
NBD's Consultant and NBD. Obligors must reimburse NBD or its agents
for all reasonable costs and fees related to the retention and use of
NBD's Consultant.
D. At the close of business on January 22, 1998 the Obligors
had a $452,531.33 overdraft on their accounts at NBD. At the close of
business on January 25, 1999, $409,626 of deposits in the Deposit
Account were used to pay down the overdraft. The Obligors acknowledge
that, notwithstanding that NBD has honored overdrafts in the past,
effective on the close of business on January 25, 1999, neither NBD
nor any of its affiliates will under any circumstances honor any
checks or other items presented to NBD or such affiliates for payment
for which there are insufficient available funds in the Obligors'
accounts and NBD or such affiliates, as the case may be, will return
any such items so presented.
E. It is anticipated that negotiations will ensue over the
coming weeks among NBD and the Obligors to address the cash flow
issues and other issues under the Loan Documents, the basis for going
forward with the relationship and the various alternatives available
to the Obligors and NBD. Without any obligation to do so, we each plan
to discuss these matters in a manner consistent with each of our
respective mutual interests. NBD and the Obligors each retain the
right, in their sole discretion, to terminate these discussions at any
time, with or without cause.
F. During the course of our discussions, we may touch upon and
possibly reach a preliminary understanding on one or more issues prior
to concluding our negotiations. Notwithstanding this fact, the Obligors
and NBD agree that no party will be bound by any such agreement on such
individual issues unless and until an agreement
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is reached which is reduced to writing and signed by the Obligors and
NBD.
G. The Obligors agree that they will pay the costs and
expenses, including attorneys' fees, incurred by NBD arising from or
relating in any way to the Loan Documents, this Eighth Amendment or any
subsequent negotiations, agreements and disputes. Furthermore, all such
fees, costs and expenses referred to in this paragraph shall constitute
a part of each Obligor's obligations owing to NBD and shall be secured
by all collateral security granted to NBD by any one or more of the
Obligors.
H. If customers, buyers, investors, potential alternative
financing sources or other parties ask NBD about the current lending
relationship between NBD and the Obligors, the Obligors agree that NBD
may refer such inquiries to the Obligors.
I. As you know, the discussions and negotiations involve both
business and legal issues. We strongly encourage you to continue the
retention of, and consultation with, legal counsel with respect to such
discussions, the execution of any agreements or any other matter
relating to the business relationship among NBD and the Obligors.
J. Neither the discussions nor anything contained in this
Eighth Amendment shall be deemed to constitute a waiver of or shall
waive any defaults that may exist as of the date hereof or any other
defaults which may arise after the date hereof or any of NBD's rights
or remedies provided in its agreements with the Obligors, including,
without limitation, all such rights and remedies under the Loan
Documents (including, but not limited to any guaranties or
subordination agreements) or the rights and remedies provided by law.
All such rights and remedies are preserved and remain in full force and
effect. Without limiting the generality of the foregoing, NBD
explicitly reserves its right to enforce its rights and remedies under
the Loan Documents and applicable law in connection with any defaults
at any time without further notice. Furthermore, to the extent NBD
makes discretionary advances, such advances shall not create a right or
expectation that further or additional advances will be made or that
other financial accommodations will be forthcoming.
K. By January 29, 1999, 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 by January 29, 1999, then such event
constitutes an Event of Default under all of the Loan Documents for
which there is no cure period. The foregoing provision amends any prior
provisions in the Loan Documents dealing with this issue, and waives
any Event of Default created by the failure to agree on amended and
reset financial covenants by January 15, 1999.
L. From and after the date of this Eighth Amendment,
references in the Loan
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Documents (i) to the "Loan Agreement" are to be treated as referring to
the Loan Agreement as amended by this Eighth Amendment; and (ii) to
"obligations" and "Obligations" are to be treated as referring to all
indebtedness and obligations referred to in this Eighth Amendment.
M. Prior to or simultaneously with execution and delivery of
this Eighth 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 Eighth Amendment. Obligors must pay all costs and expenses
(including attorneys' fees) incurred by Bank in connection with this
Eighth Amendment.
N. 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
Eighth 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.
O. Obligors represent and warrant to NBD that:
(1) The execution, delivery and performance of this
Eighth Amendment by the Obligors and all agreements and
documents delivered by Obligors in connection with this Eighth
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
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.
(2) 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 Eighth Amendment and all agreements and documents
delivered in connection with this Eighth Amendment.
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(3) This Eighth Amendment and all agreements and
documents delivered by Obligors in connection with this Eighth
Amendment are the legal, valid and binding obligations of
Obligors enforceable against each of them in accordance with
the terms thereof.
P. The terms and provisions of this Eighth Amendment amend,
add to and constitute a part of the Loan Agreement. Except as expressly
modified and amended by the terms of this Eighth 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.
Q. If there is an express conflict between the terms of this
Eighth Amendment to Loan Agreement and the terms of the Loan Agreement
or the other Loan Documents, the terms of this Eighth Amendment govern
and control.
R. This Eighth 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.
S. 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.
T. There are no promises or inducements which have been made
to any signatory hereto to cause such signatory to enter into this
Eighth Amendment other than those which are set forth in this Eighth
Amendment.
U. 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,
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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.
V. 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 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. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
First Vice President
UNIVERSAL STANDARD
HEALTHCARE, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx
Vice President Finance and Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF MICHIGAN, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx, Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF OHIO, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx, Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF DELAWARE, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx, Treasurer
A/R CREDIT, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx, Treasurer
UNIVERSAL STANDARD HEALTHCARE
OF FLORIDA, INC.
By: Xxxx X. Xxx
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Xxxx X. Xxx, Treasurer
