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EXHIBIT 10
AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
The undersigned UNITED AMERICAN HEALTHCARE CORPORATION, a MICHIGAN
CORPORATION, with its chief executive offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), has requested
from MICHIGAN NATIONAL BANK, a NATIONAL BANKING ASSOCIATION, of 27777 INKSTER
ROAD [10-60], ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Bank"), and Bank
agrees to make, or has made, the loan(s) described below (the "Loans") under
the terms and conditions set forth in this Business Loan Agreement
("Agreement").
THIS AMENDED AND RESTATED BUSINESS LOAN AGREEMENT AMENDS AND RESTATES,
IN ITS ENTIRETY, A BUSINESS LOAN AGREEMENT DATED MARCH 10, 1994,
EFFECTIVE DECEMBER 2, 1993, AS AMENDED FROM TIME TO TIME.
I. LOANS.
The following Loans and any amendments, extensions, renewals or
refinancings thereof are subject to this Agreement:
TYPE OF LOAN LOAN AMOUNT LOAN DATE
LINE OF CREDIT $22,944,205.00 03/12/1998,
EFFECTIVE
02/01/1998
PURPOSE of Loans listed above:
RENEWAL AND INCREASE OF EXISTING LINE OF CREDIT, NOTE NO. 02007144, TO
BE USED FOR WORKING CAPITAL LIQUIDITY; PAY OFF THE PRINCIPAL
OUTSTANDING BALANCE ON TERM LOANS, NOTE NO.'S 02065406; 02065407, AND
02104883, AND GUARANTY PAYMENT FOR EXISTING LETTER OF CREDIT NO.
LC-017478-DY ISSUED FOR INSURANCE PURPOSES FOR THE ACCOUNT OF OMNICARE
HEALTH PLAN OF LOUISIANA, LISTING LIBERTY BANK AND TRUST AS
BENEFICIARY
II. BORROWER'S REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Bank, all of which representations
and warranties shall be continuing until all of Borrower's Obligations
under this Agreement and the Related Documents are fully performed, as
follows:
A. BORROWER'S EXISTENCE AND AUTHORITY. Borrower is a MICHIGAN
CORPORATION, and the Person executing this Agreement has full power
and complete authority to execute this Agreement and all Related
Documents.
B. VALIDITY OF INDEBTEDNESS AND AGREEMENT. Borrower's Indebtedness to
Bank, this Agreement, and all Related Documents are valid, binding
upon, and fully enforceable against Borrower in accordance with their
respective terms.
C. NATURE OF BORROWER'S BUSINESS. The nature of Borrower's business is
to: PROVIDE MANAGEMENT AND CONSULTANT SERVICES FOR PUBLIC AND PRIVATE
HEALTH CARE SYSTEMS.
D. FINANCIAL INFORMATION. All Financial Statements provided to Bank have
been prepared and shall continue to be prepared in accordance with
generally accepted accounting principles ("GAAP"), consistently
applied, and fully and fairly present the financial condition of
Borrower. There has been no material adverse change in Borrower's
business, Property, or financial condition since the date of Borrower's
latest Financial Statements provided to Bank.
E. TITLE AND ENCUMBRANCES. Borrower owns all of its Property, and there
are no liens or encumbrances on any of the Property except as have been
disclosed to Bank in writing prior to the date of this Agreement and
which are identified and listed in an attachment to this Agreement (the
"Permitted Encumbrances"). Borrower agrees that Borrower shall not
obtain further loans, leases, or credit extensions from any Person
identified in the Permitted Encumbrances list or otherwise without
Bank's prior written consent.
F. NO LITIGATION. There are no suits or proceedings pending before any
court, government agency, arbitration panel, or administrative
tribunal, or, to Borrower's knowledge, threatened against Borrower,
which may result in any material adverse change in the business,
Property or financial condition of Borrower, EXCEPT AS PREVIOUSLY
DISCLOSED IN BORROWER'S DECEMBER 31, 1997 10Q REPORT TO THE SECURITIES
AND EXCHANGE COMMISSION, AND FURTHER BANK IS AWARE THAT ULTRAMEDIX IS
NOW IN RECEIVERSHIP.
G. NO MISREPRESENTATIONS. All representations and warranties in this
Agreement and the Related Documents are true and correct and no
material fact has been omitted.
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H. EMPLOYEE BENEFIT PLANS. Borrower has not incurred any material
accumulated funding deficiency within the meaning of ERISA, and has not
incurred any material liability to the PBGC in connection with any
employee benefit plan established or maintained by Borrower, and no
reportable event or prohibited transaction, as defined in ERISA, has
occurred with respect to such plan(s).
I. ENVIRONMENTAL COMPLIANCE. Borrower is in full compliance with all
applicable Environmental Laws. See Section III.H.
J. YEAR 2000 COMPLIANCE. Borrower is aware of and is actively addressing
the so-called "Millennium Bug" to insure that all of Borrower's
computer software and systems will be fully Year 2000 compliant.
III. AFFIRMATIVE COVENANTS.
As of the date of this Agreement and continuing until Borrower's
Obligations under this Agreement and the Related Documents are fully
performed, Borrower SHALL:
A. FINANCIAL REQUIREMENTS.
1. MEET WITH BANK TO ESTABLISH FINANCIAL COVENANTS FOR A MINIMUM
NET WORTH; DEBT SERVICE COVERAGE RATIO AND MAXIMUM DEBT TO WORTH
RATIO, WITHIN TWENTY (20) DAYS AFTER THE EARLIER OF EITHER (I)
FEBRUARY 1, 1999 OR (II) THE SALE OF CORPORATE HEALTH CARE,
FINANCING, INC. ("CHF") AND THE JUNE 30, 1998, FORM 10K HAS BEEN
RECEIVED BY BANK.
B. BOOKS AND REPORTS.
1. FINANCIAL STATEMENTS. Within ONE HUNDRED TWENTY (120) DAYS
after the end of each fiscal YEAR, furnish to Bank, in form
acceptable to Bank, Borrower's AUDITED Financial Statements for
the foregoing period prepared by A CERTIFIED PUBLIC ACCOUNTANT
ACCEPTABLE TO BANK.
2. FINANCIAL STATEMENTS. Within the earlier of ONE HUNDRED TWENTY
(120) DAYS after the end of each FISCAL YEAR, or FIVE (5) DAYS
of filing with the SECURITIES AND EXCHANGE COMMISSION, furnish
Bank, in form acceptable to Bank, 10K FINANCIAL STATEMENTS for
the foregoing period, certified to be correct by Borrower's
Treasurer or Chief Financial Officer.
3. FINANCIAL STATEMENTS. Within the earlier of SIXTY (60) DAYS
after the end of each FISCAL QUARTER, or FIVE (5) DAYS of filing
with the SECURITIES AND EXCHANGE COMMISSION, furnish Bank, in
form acceptable to Bank, 10Q FINANCIAL STATEMENTS for the
foregoing period, certified to be correct by Borrower's
Treasurer or Chief Financial Officer.
4. FINANCIAL STATEMENTS. Within THIRTY (30) DAYS after the end of
each fiscal MONTH, furnish to Bank, in form acceptable to Bank,
Borrower's MANAGEMENT prepared Financial Statements for the
foregoing period certified to be correct by Borrower's Treasurer
or Chief Financial Officer.
5. FINANCIAL STATEMENTS. Within THIRTY (30) DAYS after the end of
each fiscal MONTH, furnish to Bank, in form acceptable to Bank,
a TURNAROUND STATUS REPORT of Borrower, which Borrower's
management prepared for the foregoing period and is certified to
be correct by Borrower's Treasurer or Chief Financial Officer.
6. FINANCIAL STATEMENTS. Within THIRTY (30) DAYS after the end of
each fiscal YEAR, furnish to Bank, in form acceptable to Bank, a
CONSOLIDATED AND CONSOLIDATING BUDGET FORECAST of Borrower,
certified to be correct by Borrower's Treasurer or Chief
Financial Officer.
7. FINANCIAL STATEMENTS. Within SIXTY (60) DAYS after the end of
each fiscal QUARTER, furnish to Bank, in form acceptable to
Bank, MANAGEMENT prepared Financial Statements of OMNICARE OF
MICHIGAN for the foregoing period and certified to be correct by
Borrower's Treasurer or Chief Financial Officer.
8. FINANCIAL STATEMENTS. Within THIRTY (30) DAYS after the end of
each fiscal QUARTER, furnish to Bank, in form acceptable to
Bank, TWELVE (12) MONTH ROLLING CASHFLOW FORECASTS of BORROWER;
OMNICARE OF MICHIGAN, AND OMNICARE OF TENNESSEE, certified to be
correct by Borrower's Treasurer or Chief Financial Officer.
9. FIELD AUDIT. Allow the Bank's internal auditors to conduct a
field audit of Borrower's books, records and properties at such
times and to such extent as Bank in its sole discretion, may
determine and Borrower agrees to pay Bank for the cost of said
audit(s).
10. OTHER. Promptly furnish to Bank such other information and
reports concerning the Borrower's business, Property, and
financial condition as are provided to Borrower's owners or as
Bank shall request, and permit Bank to inspect, confirm, and
copy Borrower's books and records at any time during Borrower's
normal business hours.
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C. NOTICE OF ADVERSE EVENTS. Promptly notify Bank in writing of any
litigation, governmental proceeding, default or any other occurrence
which could have a material adverse effect on Borrower's business,
Property or financial condition.
D. MAINTAIN BUSINESS EXISTENCE AND OPERATIONS. Do all things necessary to
keep in full force and effect Borrower's corporate, partnership,
proprietorship, trust, or other existence, as the case may be, and to
continue its business described in Paragraph II.C. as presently
conducted. Borrower shall not change its corporate, partnership,
proprietorship, trust, or other existence, nor sell or merge Borrower's
business, in whole or in part, to or with any other Person, without the
prior written consent of Bank.
E. INSURANCE. Maintain adequate fire and extended risk coverage, business
interruption, workers disability compensation, public liability,
environmental, flood, and such other insurance coverages as may be
required by law or as may be required by Bank. All insurance policies
shall be in such amounts, upon such terms, in form, and carried with
such insurers, as are acceptable to Bank. Borrower shall provide
evidence satisfactory to Bank of all insurance coverages and that the
policies are in full force and effect, and for all insurance coverages
upon any Property which is Collateral, the insurance policy shall be
endorsed to provide Bank with a standard loss payable clause insuring
the Bank's interest without regard to any act, fault or neglect of
Borrower, with not less than thirty (30) days advance written notice to
Bank by the insurer of any cancellation or modification of coverage
(CF12181185). Any failure to maintain insurance as provided in this
Agreement shall be an Event of Default and Bank may obtain such
insurance as the Bank deems necessary or prudent, in the Bank's sole
discretion, without obligation to do so, and all amounts so expended by
Bank shall be added to the Indebtedness or shall be payable on demand,
at Bank's option. Upon Borrower's failure to promptly provide evidence
of such insurance as Bank has required, the Bank may assume Borrower
does not have the required coverage. Upon Borrower's failure to obtain
or maintain any insurance coverages required under this Agreement, the
Bank may assess a service charge for obtaining and servicing any
insurance coverage(s).
F. PAYMENT OF TAXES. Pay all taxes, levies and assessments due to all
local, State and Federal agencies, before any interest or penalty
thereon becomes due and payable. Unless Borrower has established a
cash reserve and is actively pursuing a tax appeal, any failure by
Borrower to pay promptly any taxes, levies and assessments shall be an
Event of Default.
G. EMPLOYEE BENEFIT PLANS.
1. At all times meet the minimum funding requirements of ERISA
concerning all of Borrower's employee benefit plans subject to
ERISA.
2. At no time shall Borrower (a) allow any event to occur or
condition concerning any employee benefit plan subject to ERISA
which might constitute grounds for termination of the plan or
for the appointment of a trustee to administer the plan; or (b)
allow any employee benefit plan to be the subject of any
voluntary or involuntary termination proceeding.
H. ENVIRONMENTAL LAWS COMPLIANCE/NOTICES/INDEMNITY. Strictly comply with
all Environmental Laws applicable to Borrower's business. Borrower
agrees to notify Bank, no later than ten (10) days after Borrower's
receipt, of any summons, notice, lawsuit, citation, letter, or other
communication received by Borrower from any Federal, State, or local
agency or unit of government or other Person, which asserts that
Borrower is in violation of any Environmental Laws. Borrower (and the
Obligors) agree to indemnify and hold Bank harmless from all violations
by Borrower of any Environmental Laws, which indemnity shall include
all costs and expenses incurred by Bank, including legal fees, which
are related to any violation by Borrower of any Environmental Laws,
whether or not the Indebtedness has been paid at the time any such
proceeding, claim, or action is instituted against Bank. Borrower
further agrees that Bank may at any time, at Borrower's sole cost and
expense, hire or require Borrower to hire and provide Bank with an
environmental audit prepared by an independent environmental
engineering firm acceptable to Bank to confirm the continuing truth and
accuracy of Borrower's environmental representations and warranties.
I. USE OF PROCEEDS; PURPOSE OF LOANS. Use the proceeds of the Loan(s)
only for Borrower's business described in Paragraph II.C., and only for
those purposes stated in Paragraph I.
J. ACCOUNT. Until all of the Indebtedness shall be fully repaid to Bank,
Borrower shall establish and maintain with Bank, a non-interest bearing
deposit account.
K. MAINTENANCE OF RECORDS; CHANGE IN PLACE OF BUSINESS OR NAME. Keep all
of its books and records at the address set forth in this Agreement,
and give the Bank prompt written notice of any change in its principal
place of business, in the location of Borrower's books and records, in
Borrower's name, and of any change in the location of the Collateral.
L. EMPLOYMENT LAWS. Strictly comply with all Federal and State laws
pertaining to Borrower's employees, including by way of illustration
but not of limitation, the Michigan Worker's Disability Compensation
Act, MCL 418.101 et seq., as amended, Michigan Employment Security
Act, MCL 421.1 et seq., as amended, and the Fair Labor Standards Act,
29 USC 201 et seq., as amended.
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M. GENERAL COMPLIANCE WITH LAW. At all times operate Borrower's business
in strict compliance with all applicable Federal, State, and local
laws, ordinances and regulations, including the Americans with
Disabilities Act of 1990, and refrain from and prevent Borrower's
partners, owners, directors, officers, employees and agents from
engaging in any civil or criminal activity proscribed by law.
N. MANAGEMENT CONTINUATION. Borrower agrees that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, OR AN
INDIVIDUAL ACCEPTABLE TO BANK, SHALL REMAIN AS CHIEF FINANCIAL OFFICER,
and shall continue to actively manage and operate Borrower's business,
and acknowledges that the Bank has made the Loans in reliance thereon.
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CORPORATE RECOVERY SERVICES. BORROWER AGREES THAT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CORPORATE RECOVERY SERVICES SHALL CONTINUE TO BE
ACTIVELY INVOLVED WITH THE TURNAROUND PROGRAM AS APPROVED BY THE BOARD
OF DIRECTORS OF BORROWER IN JANUARY, 1998, UNTIL PLANNED
LIQUIDATION/EXIT PROGRAMS HAVE BEEN COMPLETED INCLUDING, BUT NOT
LIMITED TO THE EXITING FROM LOUISIANA, FLORIDA, PENNSYLVANIA AND CHF.
P. BORROWER HAS PREVIOUSLY AGREED TO SELL ITS CHF SUBSIDIARY, AND BANK IS
AWARE OF SUCH SALE, ON OR BEFORE FEBRUARY 1, 1999.
IV. NEGATIVE COVENANTS.
Until all of Borrower's Obligations under this Agreement and the
Related Documents are fully performed, without the Bank's prior written
consent Borrower SHALL NOT:
A. NO BORROWINGS, GUARANTEES, OR LOANS. Borrow money or act as guarantor
of any loan or other obligation or lend any money to any Person without
Bank's prior written consent. Any sale of Borrower's accounts
receivable shall be deemed the borrowing of money.
B. LIENS AND ENCUMBRANCES; TRANSFER OF ASSETS. Mortgage, assign, or
encumber any of its Property except to Bank, nor sell, transfer or
assign any Property except in the ordinary course of business.
C. DIVIDENDS, DISTRIBUTIONS; CAPITAL STRUCTURE. If Borrower is a
corporation, it shall not purchase, sell, or retire any of its shares,
nor alter or amend its capital structure without Bank's prior written
consent, provided, however, with respect to any year in which Borrower
is taxed by the Internal Revenue Service as an "S" Corporation,
Borrower may make a distribution of profits to its shareholders not to
exceed an amount necessary to enable its shareholders to pay their
personal State and Federal taxes directly attributable to the profits
earned by Borrower in such year.
V. SECURITY FOR LOANS.
A. SECURITY/MORTGAGE INTERESTS. Borrower and the other Obligor(s) named
in this Agreement have granted or agree to grant to Bank on the date of
this Agreement, security/mortgage interests in certain Property as
collateral security for the Loans and repayment of the Indebtedness,
among which are the following Related Documents:
PLEDGE AGREEMENT DATED MARCH 12, 1998, EFFECTIVE FEBRUARY 1, 1998
VI. EVENTS OF DEFAULT.
The occurrence and continuation of any of the following events after
any notice and cure period specifically provided shall constitute an
Event of Default under this Agreement:
A. FAILURE TO PAY AMOUNTS DUE. Any principal or interest on any
Indebtedness to Bank is not paid within ten (10) days after the due
date.
B. MISREPRESENTATION; FALSE FINANCIAL INFORMATION. Any statement,
warranty or representation of Borrower in connection with or contained
in this Agreement, the Related Documents, or any Financial Statements
now or hereafter furnished to the Bank by or on behalf of the Borrower,
is false or misleading.
C. NONCOMPLIANCE WITH BANK AGREEMENTS. Borrower breaches any covenant,
term, condition or agreement stated in this Agreement or any other
agreement including, but not limited to the Related documents and said
breach is not fully cured and corrected within ten (10) days after
Bank's notice of default.
D. CESSATION/TERMINATION OF EXISTENCE. Borrower shall cease doing
business or Borrower's existence is terminated by death, sale,
dissolution, merger or otherwise.
E. BANKRUPTCY OR RECEIVERSHIP. Any conveyance of substantially all of
Borrower's assets, any assignment is made for the benefit of creditors,
any receiver is appointed, or any insolvency, liquidation or
reorganization proceeding under the Bankruptcy Code or otherwise shall
be filed by or against Borrower which is not dismissed within ten (10)
calendar days after filing.
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F. ATTACHMENTS; TAX LIENS. Any attachment, execution, levy, forfeiture,
tax lien or similar writ or process is issued against the Collateral
and is not removed within ten (10) calendar days after filing.
G. INDICTMENT. The institution of any criminal proceeding against
Borrower, the Borrower's management, or any Obligor which is not
dismissed within ten (10) calendar days after initiation.
H. AUTHORITY TO CHARGE INTEREST RATE ADVERSELY AFFECTED. Bank shall
determine the Loans interest rate is usurious or is otherwise unlawful
or limited.
I. MATERIAL ADVERSE CHANGE. Any material adverse change occurs or is
imminent the effect of which would be to substantially diminish
Borrower's or any Obligor's financial condition, business, ability to
perform their agreements with the Bank, or the value of the Collateral.
J. OTHER LENDER DEFAULT. Any other indebtedness of Borrower to the Bank
or to any other creditor becomes due and remains unpaid after
acceleration of the maturity or after the maturity stated.
K. CANCELLATION OF LETTER OF CREDIT. BORROWER FAILS TO OBTAIN OR ARRANGE
FOR THE RETURN OR CANCELLATION OF THE EXISTING LETTER OF CREDIT NO.
LC-017478-DY, IN THE AMOUNT OF $500,000.00 FROM THE BENEFICIARY ON OR
BEFORE JULY 31, 1998.
VII. REMEDIES ON DEFAULT.
A. ACCELERATION. Upon the occurrence of any Event of Default, the Loans
and all Indebtedness to Bank may, at the option of Bank, and without
demand or notice of any kind, be declared to be immediately due and
payable.
B. REMEDIES CUMULATIVE. The remedies provided for in this Agreement are
cumulative and not exclusive, and Bank may exercise any remedies
available to it at law or in equity, and as are provided in this
Agreement, the Related Documents, and any other agreement between
Borrower and Bank.
C. NO WAIVER. No delay or failure of Bank to exercise any right, remedy,
power or privilege hereunder shall affect that right, remedy, power or
privilege, nor shall any single or partial exercise thereof preclude
the exercise of any other right, remedy, power or privilege. No Bank
delay or failure to demand strict adherence to the terms of this
Agreement shall be deemed to constitute a course of conduct
inconsistent with the Bank's right to at any time, before or after any
Event of Default, demand strict adherence to the terms of this
Agreement and the Related Documents.
D. BANK'S RIGHT OF SET-OFF. Upon the occurrence of any Event of Default,
Bank shall have the right to apply any or all of Borrower's and any
Obligor's bank accounts or any other Property held by Bank against any
Indebtedness of Borrower to Bank.
VIII. CROSS-COLLATERALIZATION/CROSS-DEFAULT.
Borrower agrees the Collateral is security for the Loans under this
Agreement and for all other Indebtedness of Borrower to Bank, whether
or not such Indebtedness is related by class or kind and whether or not
contemplated by the parties at the time of executing each evidence of
Indebtedness. Any Borrower default under the terms of any Indebtedness
to Bank shall also constitute an Event of Default under this Agreement
and any Event of Default under this Agreement shall be a default under
any Indebtedness of Borrower to Bank.
IX. MISCELLANEOUS.
A. COMPLIANCE WITH BANK AGREEMENTS. Borrower acknowledges that it has
carefully read, and agrees to fully comply with this Agreement, the
Related Documents, and all other agreements between Borrower and Bank.
B. EXPENSES. Borrower agrees to pay all of Bank's costs and expenses
incurred to perfect or protect the Bank's security interests and liens,
pay any insurance premiums, Uniform Commercial Code search fees, taxes,
Environmental Laws inspection fees, appraisal fees, and all fees and
costs incurred by Bank for audits, inspection, and copying of
Borrower's books and records. Borrower also agrees to pay all costs
and expenses of Bank, including reasonable attorney fees, in connection
with the enforcement of the Bank's rights and remedies under this
Agreement, the Related Documents and any other agreement, and in
connection with the preparation of any amendments, modifications,
waivers or consents with respect to this Agreement.
C. FURTHER ACTION. Borrower agrees, from time to time upon Bank's
request, to make, execute, acknowledge, and deliver to Bank such
further and additional instruments, documents, and agreements, and to
take such further action as may be required to carry out the intent and
purpose of this Agreement and repayment of the Loans.
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D. GOVERNING LAW, PARTIAL ILLEGALITY. This Agreement and the Related
Documents shall be interpreted and the rights of the parties determined
under the laws of the State of Michigan. Should any part, term, or
provision of this Agreement be adjudged illegal or in conflict with any
law of the United States or State of Michigan, the validity of the
remaining portion or provisions of the Agreement shall not be affected.
E. WRITINGS CONSTITUTE ENTIRE AGREEMENT; MODIFICATIONS ONLY IN WRITING.
This Agreement, the Related Documents and all other written agreements
between Borrower and Bank, constitute the entire agreement of the
parties and there are no other agreements, express or implied. This
Agreement supersedes any and all commitment letters or term sheets
heretofore issued in connection with this Loan. None of the parties
shall be bound by anything not expressed in writing, and neither this
Agreement, the Related Documents, nor any other agreement can be
modified except by a writing executed by Borrower and by the Bank.
This Agreement shall inure to the benefit of and shall be binding upon
all of the parties to this Agreement and their respective successors,
estate representatives, and assigns, provided however, that Borrower
cannot assign or transfer its rights or obligations under this
Agreement without Bank's prior written consent.
F. CREDIT INQUIRIES. Borrower hereby authorizes Bank to respond to any
credit inquiries received by Bank from trade creditors or other credit
granting institutions.
G. RELEASE OF CLAIMS AGAINST BANK. In consideration of the Bank making
the Loans described in this Agreement, Borrower and the Obligor(s) do
each hereby release and discharge Bank of and from any and all claims,
harm, injury, and damage of any and every kind, known or unknown, legal
or equitable, which Borrower or any of the Obligor(s) have against the
Bank from the date of their respective first contact with Bank until
the date of this Agreement. Borrower and the Obligor(s) confirm to Bank
that they have reviewed the effect of this release with competent legal
counsel of their choice, or have been afforded the opportunity to do
so, prior to execution of this Agreement and the Related Documents and
do each acknowledge and agree that Bank is relying upon this release in
extending the Loans to Borrower.
H. WAIVER OF JURY TRIAL. Borrower and the Obligors do each knowingly,
voluntarily and intelligently waive their constitutional right to a
trial by jury with respect to any claim, dispute, conflict, or
contention, if any, as may arise under this Agreement or under the
Related Documents, and agree that any litigation between the parties
concerning this Agreement and the Related Documents shall be heard by a
court of competent jurisdiction sitting without a jury. Borrower and
the Obligor(s) hereby confirm to Bank that they have reviewed the
effect of this waiver of jury trial with competent legal counsel of
their choice, or have been afforded the opportunity to do so, prior to
signing this Agreement and the Related Documents and do each
acknowledge and agree that Bank is relying upon this waiver in
extending the Loans to Borrower.
I. HEADINGS. All section and paragraph headings in this Agreement are
included for convenience only and do not constitute a part of this
Agreement.
J. TERM OF AGREEMENT. This Agreement supersedes and replaces all previous
loan agreements with regard to the Loans described in Paragraph I.
Unless superseded by a later Business Loan Agreement, this Agreement
shall continue in full force and effect until all of Borrower's
Obligations to Bank are fully satisfied and the Loans and Indebtedness
are fully repaid.
K. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
L. PLEDGE OF NON-REFUNDABLE DEPOSITS. BORROWER HEREBY CONSENTS AND AGREES
TO PLEDGE TO, AND PROVIDE A FIRST PRIORITY PERFECTED SECURITY INTEREST
IN THE NON-REFUNDABLE DEPOSIT ON THE SALE OF CHF, OR ANY OTHER DEPOSIT
ON THE SALE OF ANY OF BORROWER'S ASSETS IN EXCESS OF $100,000.00, TO
BANK. THE PROCEEDS OF ANY SUCH DEPOSIT SHALL BE APPLIED TO REDUCE THE
LINE OF CREDIT LOAN, AS REFERENCED IN SECTION I. ABOVE, AT BANK'S
DISCRETION, EXCEPT THAT THE NET SALE PROCEEDS FROM CHF SHALL BE APPLIED
TO PERMANENTLY REDUCE THE LINE OF CREDIT LOAN AS MORE PARTICULARLY SET
FORTH IN THE ATTACHED BUSINESS LOAN AGREEMENT ADDENDUM (LINE OF CREDIT
WITH LETTER OF CREDIT ADVANCES) SECTION IV.
M. COMMITMENT FEE. BORROWER HEREBY AGREES TO PAY TO BANK A TWENTY FIVE
THOUSAND AND 00/100 DOLLAR ($25,000.00) COMMITMENT FEE. IF BORROWER
HAS NOT PAID THE ENTIRE COMMITMENT FEE PRIOR TO CLOSING, THEN BORROWER
WILL PAY $5,000.00 AT CLOSING, WITH THE REMAINDER TO BE PAID IN MONTHLY
INSTALLMENTS OF $5,000.00 DUE THE FIRST OF EACH MONTH COMMENCING UPON
THE DATE OF THE FIRST REQUIRED INTEREST PAYMENT.
X. DEFINITIONS.
The following words shall have the following meanings in this
Agreement:
A. "AVERAGE INVESTABLE BALANCE" means the average daily ledger balance in
Borrower's deposit account referred to in Paragraph III.K. of this
Agreement, less (i) average daily uncollected deposits, (ii) Bank's
reserve requirement, and (iii) amounts necessary to offset applicable
service charges, for
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the period covered by the account analysis statement provided by Bank,
as shown on such account analysis statement.
B. "BASE RATE" or "PRIME RATE" means that variable rate of interest from
time to time established by the bank designated in the Loan promissory
note(s) and Section I. of this Agreement as its base or prime
commercial lending rate.
C. "BANK" means Michigan National Bank, a National banking association,
and any successor or assign.
D. "COLLATERAL" means that Property which Borrower and any other Obligor
has pledged, mortgaged, or granted Bank a security interest in,
wherever located and whether now owned or hereafter acquired, together
with all replacements, substitutions, proceeds and products thereof.
E. "CURRENT RATIO" means that ratio obtained by dividing total current
assets by total current liabilities as determined under GAAP.
F. "DEBT SERVICE COVERAGE RATIO" means that ratio obtained by dividing the
sum of Borrower's (i) net income after taxes and distributions, (ii)
interest expense, (iii) depreciation expense, and (iv) amortization
expense, by the sum of Borrower's interest expense plus current
maturities of long-term debt, all as determined under GAAP.
G. "ENVIRONMENTAL LAWS" means all laws, regulations, and rules of the
United States of America, State of Michigan, and local authorities
which pertain to the environment, including but not limited to, the
Clean Air Act (42 USC 7401 et seq.), Clean Water Act (33 USC 1251 et
seq.), Resource Conservation and Recovery Act of 1976 (42 USC 6901 et
seq.), Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (42 USC 9601 et seq.), Hazardous Materials
Transportation Act (49 USC 1801 et seq.), Solid Waste Disposal Act (42
USC 6901 et seq.), Toxic Substances Control Act (15 USC 2601 et seq.),
Michigan Natural Resources and Environmental Protection Act (MCL
324.101 et seq. as each of said statutes have been or are hereafter
amended, together with all rules and regulations promulgated by the
Environmental Protection Agency and Michigan Departments of Natural
Resources and Environmental Quality and all additional environmental
laws, rules, and regulations in effect on the date of this Agreement
and as may be enacted and effective.
H. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor act.
I. "EVENT OF DEFAULT" means any of the events described in Section VI. of
this Agreement or in the Related Documents.
J. "FINANCIAL STATEMENTS" means all balance sheets, cash flows, earnings
statements, and other financial information (whether of the Borrower or
an Obligor) which have been, are now, or are in the future furnished to
Bank.
K. "GAAP" means "generally accepted accounting principles" consistently
applied, as set forth from time to time in the Opinion of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board, or
which have other substantial authoritative support.
L. "GUARANTOR" means any Person who has guaranteed payment of the Loans.
M. "INDEBTEDNESS" OR "OBLIGATIONS" means all Loans, indebtedness, and
obligations of Borrower to the Bank, including but not limited to, any
Bank advances for payments of insurance, taxes, amounts advanced by
Bank to protect its interest in the Collateral, overdrafts in deposit
accounts with Bank, and all other indebtedness, obligations and
liabilities of Borrower to Bank, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent,
joint or several, due or to become due, now existing or hereafter
arising.
N. "MICHIGAN NATIONAL BANK PRIME RATE" or "MICHIGAN NATIONAL BANK PRIME"
means that variable rate of interest so designated and from time to
time established as the Michigan National Bank prime commercial lending
rate or such prime commercial lending rate.
O. "NET WORTH" means the difference between Borrower's total assets and
total liabilities, as determined under GAAP.
P. "OBLIGOR" means any person having any obligation to Bank, whether for
the payment of money or otherwise, under this Agreement or under the
Related Documents, including but not limited to any guarantors of
Borrower's Indebtedness.
Q. "PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the powers and functions of the Pension Benefit Guaranty
Corporation.
- 9 -
8
R. "PERSON" means any individual, corporation, partnership, joint venture,
association, trust, unincorporated association, joint stock company,
government, municipality, political subdivision, agency or other
entity.
S. "PROPERTY" means all of Borrower's (or other Obligor's, as applicable)
assets, tangible and intangible, real and personal.
T. "QUICK RATIO" means the total of Borrower's cash, marketable securities
and accounts receivable, divided by current liabilities, as determined
under GAAP.
U. "RELATED DOCUMENTS" means any and all documents, promissory notes,
security agreements, leases, mortgages, guaranties, pledges, and any
other documents or agreements executed in connection with this
Agreement. The term shall include documents existing before, at the
time of execution of, this Agreement, and documents executed after the
date of this Agreement.
V. "SUBORDINATED DEBT" means all of that indebtedness to others, and all
collateral security therefor, identified in Section III.J. of this
Agreement.
W. "TANGIBLE NET WORTH" means Net Worth plus Subordinated Debt less
intangible assets and all sums due from Affiliates.
X. "WORKING CAPITAL" means the excess of Borrower's current assets over
current liabilities, determined under GAAP.
XI. ADDITIONAL AGREEMENTS:
SEE THE BUSINESS LOAN AGREEMENT ADDENDUM (LINE OF CREDIT WITH LETTER OF
CREDIT ADVANCES), OF EVEN DATE HEREOF, FOR ADDITIONAL TERMS AND
CONDITIONS.
IN WITNESS WHEREOF the parties have executed this Agreement on this
12TH day of MARCH , 1998, EFFECTIVE AS OF FEBRUARY 1, 1998.
BORROWER:
UNITED AMERICAN HEALTHCARE
CORPORATION,
a MICHIGAN CORPORATION
By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Its: Chief Executive Officer
AND
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Interim Chief Financial Officer
BANK:
MICHIGAN NATIONAL BANK,
A NATIONAL BANKING ASSOCIATION
By: ________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Corporate Asset Manager
- 10 -
9
SCHEDULE OF PERMITTED ENCUMBRANCES
ATTACHED TO AND FORMING A PART OF AN AMENDED RESTATED BUSINESS LOAN AGREEMENT
BY AND BETWEEN UNITED AMERICAN HEALTHCARE CORPORATION, A MICHIGAN CORPORATION,
AND MICHIGAN NATIONAL BANK, A NATIONAL BANKING ASSOCIATION
DATED MARCH 12, 1998, EFFECTIVE FEBRUARY 1, ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
FILING NO. SECURED PARTY FILING DATE
----------- ------------- -----------
C742014 American Rentals 07/29/93
57420B General Electric Capital Corporation 06/16/95
(Lease)
C990349 Pitney ▇▇▇▇▇ Credit Corporation 07/11/95
(Lease)
D282752 SunTel Services, Inc. 09/23/97
(Lease)
D282753 SunTel Services, Inc. 09/23/97
(Lease)
______________
(INITIALS)
- 11 -
10
BUSINESS LOAN AGREEMENT ADDENDUM
(LINE OF CREDIT WITH LETTER OF CREDIT ADVANCES)
This Addendum Agreement ("Addendum") is an integral part of the
Business Loan Agreement executed by Borrower, and each and all of the terms,
conditions, provisions and agreements set forth in the Business Loan Agreement
are incorporated by this reference into this Addendum.
I. LINE OF CREDIT LOAN
Under those terms and conditions set forth in the Business Loan
Agreement and in this Addendum, and provided there shall exist no Event of
Default, Bank agrees from time to time, at Borrower's request, to provide
Borrower with Advances in an aggregate amount up to but not to exceed THE
LESSER OF the sum of TWENTY TWO MILLION FOUR HUNDRED FORTY FOUR THOUSAND TWO
HUNDRED FIVE AND 00/100 DOLLARS ($22,444,205.00), or the maximum of Advances
allowable under the Advance Requirement set forth in Section IV of this
Addendum, AND CREDIT ADVANCES UP TO BUT NOT TO EXCEED FIVE HUNDRED THOUSAND AND
00/100 DOLLARS ($500,000.00), (the "Line of Credit Loan").
II. LINE OF CREDIT NOTE
The Line of Credit Loan shall be signified by Borrower's execution and
delivery to Bank of a promissory note to Bank's order in the amount of the Line
of Credit Loan (the "Line of Credit Note").
III. EXPIRATION OF BANK'S COMMITMENT
Bank's obligation to make any Advance or Credit Advance under the Line
of Credit Loan and Line of Credit Note shall automatically (a) cease and
terminate upon the maturity date stated in the Line of Credit Note; (b) suspend
or terminate (at Bank's option), upon the occurrence of any Event of Default
unless Bank in writing agrees to waive said Event of Default; AND (C) CREDIT
ADVANCE UNDER THE LINE OF CREDIT LOAN AND LINE OF CREDIT NOTE SHALL
AUTOMATICALLY CEASE AND TERMINATE ON JULY 31, 1998, OR BORROWER WILL BE IN
DEFAULT. No subsequent Advance by Bank shall be construed as a waiver by Bank
of the benefit of this provision, nor shall Bank be estopped thereby to refuse
any subsequent Borrower Advance request.
IV. ADVANCE REQUIREMENT
All Advances and Credit Advances to Borrower under the Line of Credit
Loan shall be made under the following Advance Requirement:
A. UNTIL SUCH TIME AS STATED HEREINAFTER, BORROWER SHALL HAVE A BORROWING
BASE NOT TO EXCEED $22,444,205.00;
B. PAY DOWNS AND READVANCES UNDER THE LINE OF CREDIT LOAN WILL BE ALLOWED
TO THE EXTENT THAT THE LOAN HAS BEEN PAID DOWN FROM CASH FLOW OR ASSET
SALES EXCLUDING THE SALE OF CORPORATE HEALTH CARE, FINANCING, INC.
("CHF"), PLUS;
C. SIXTY (60%) PERCENT OF THE NET SALE PROCEEDS FROM CHF ARE TO BE APPLIED
AS A PERMANENT REDUCTION TO THE BANK'S COMMITMENT ON OR BEFORE FEBRUARY
1, 1999 (THE "SALE OF SUBSIDIARY AND APPLICATION OF PROCEEDS"), PLUS;
D. BY FEBRUARY 1, 1999, BANK'S COMMITMENT SHALL BE PERMANENTLY REDUCED TO
THE LESSER OF THE THEN OUTSTANDING PRINCIPAL BALANCE OR $8,000,000.00,
PLUS;
E. ON OR BEFORE JULY 31, 1998, BORROWER WILL OBTAIN OR ARRANGE FOR THE
RETURN OR CANCELLATION OF THE EXISTING LETTER OF CREDIT NO.:
LC-017478-DY, IN THE AMOUNT OF $500,000.00 FOR THE ACCOUNT OF OMNICARE
HEALTH PLAN OF LOUISIANA, LISTING LIBERTY BANK AND TRUST AS THE
BENEFICIARY, AT WHICH TIME CREDIT ADVANCE CAPABILITY WILL CEASE TO
EXIST.
V. ADVANCE PROCEDURE
Subject to Paragraph III above, Borrower may request an Advance on any
day the Bank is open for business and Bank will promptly make the Advance
available to Borrower by crediting Borrower's general deposit account number
▇▇▇▇-▇▇▇▇▇-▇ in the amount requested, or in such other manner as Borrower shall
request in writing, unless the requested Advance, when aggregated with all
prior unpaid Advances would exceed the lesser of the Line of Credit Loan or the
maximum loan under the Advance Requirement.
11
VI. CREDIT ADVANCE PROCEDURE
Subject to Paragraph III above, Credit Advances would be provided to
Borrower through July 30, 1998, upon Bank receiving draft instructions,
acceptable to Bank, from Liberty Bank and Trust on Letter of Credit No.
LC-017478-DY, in an amount not to exceed Five Hundred Thousand and 00/100
Dollars ($500,000.00). Credit Advances shall be made only under the following
terms and conditions:
A. Borrower acknowledges and agrees that the Letter of Credit issued by
Bank for the account of OMNICARE HEALTH PLAN OF LOUISIANA is subject to
all terms and conditions set forth in the Application including,
without limitation, the grant to Bank of a security interest in such
collateral as is identified in the Business Loan Agreement and/or in
the Application.
B. Borrower shall pay to Bank, for the Letter of Credit issued by Bank for
the account of OMNICARE HEALTH PLAN OF LOUISIANA, all fees, charges,
and expenses specified in Bank's international department standard fee
schedule then in effect including, without limitation, issuance fees,
payment fees, amendment fees, non-utilization fees, communication and
delivery expenses, and any and all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in defending any suit or
claim brought against the Bank by any Letter of Credit beneficiary.
For each Letter of Credit draft received and paid by Bank, Borrower's
obligation to immediately put Bank in good funds shall be funded by an
Advance under the Line of Credit Note to the extent unpaid Advances and
other open and outstanding Credit Advances do not exceed the lesser of
the Line of Credit Loan or Advance Requirement, otherwise Borrower
shall immediately pay Bank the entire amount of any Letter of Credit
draft paid by Bank;
VII. BORROWER REPORTS
Until all Advances under the Line of Credit Note, together with accrued
interest thereon, are fully repaid to Bank and Bank's obligation under all
Credit Advances is terminated, Borrower agrees promptly to provide Bank, UPON
REQUEST, with the following periodic reports:
A. ACCOUNTS AGINGS REPORT. Upon request, Borrower shall furnish to Bank a
report certified by Borrower's Treasurer or chief financial officer and
showing the number and dollar sum of all of Borrower's Accounts
outstanding and unpaid at the end of Borrower's preceding calendar
month, together with an aging schedule showing the number and dollar
amounts of all Accounts outstanding and unpaid for more than 30, 60,
and 90 days. All of Borrower's Accounts reports shall be in form
satisfactory to the Bank and, upon Bank's request, Borrower agrees
immediately to provide Bank such additional Accounts information as
Bank shall request including, but not limited to, a list with the name,
address and amount of each Account Debtor's indebtedness to Borrower.
B. ACCOUNTS PAYABLE AGINGS. Upon request, Borrower shall furnish to Bank
a report certified by Borrower's Treasurer or chief financial officer
and showing the number and dollar sum of all of Borrower's accounts
payable outstanding and unpaid for more than 30, 60, and 90 days. All
of Borrower's accounts payable reports shall be in form satisfactory to
Bank and, upon Bank's request, Borrower agrees to immediately provide
Bank such additional information with respect to any account payable as
Bank specifies, including, but not limited to, a list with the name,
address and amount of each account payable.
VIII. EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute an Event
of Default under this Addendum:
A. Any Event of Default under the Business Loan Agreement of which this
Addendum is a part, INCLUDING, BUT NOT LIMITED TO BORROWER'S FAILURE TO
OBTAIN OR ARRANGE FOR THE RETURN OR CANCELLATION OF THE EXISTING LETTER
OF CREDIT NO. LC-017478-DY, ON OR BEFORE JULY 31, 1998;
B. Any Borrower breach of any provision or agreement in this Addendum;
C. Any representation or warranty made under this Addendum is or becomes
false or misleading in any material respect;
D. The aggregate unpaid principal amount of all Advances and Bank
obligations under all open Credit Advances exceeds the lesser of the
Line of Credit Note or the maximum of Advances and Credit Advances
available under the Advance Requirement.
IX. REMEDIES ON DEFAULT
Upon the occurrence of any Event of Default under this Addendum, Bank
shall have all remedies as are provided by law or by the Business Loan
Agreement, the Line of Credit Note, the Application, or any mortgage, security
or other collateral agreement.
- 2 -
12
. DEFINITIONS
The following terms used in this Addendum shall have the following
meanings:
A. "ADVANCE" or "ADVANCES" shall mean a loan or loans of money from Bank to
Borrower.
B. "ADVANCE REQUIREMENT" shall mean the maximum aggregate Advances and
Credit Advances for which Borrower from time to time will be eligible
under the Line of Credit Loan by application of the requirements set
forth in Section IV above.
C. "BORROWING BASE" SHALL MEAN AN AMOUNT WHICH MAY BE ADVANCED WITHOUT
REFERENCE TO ANY ADVANCE REQUIREMENTS.
D. "CREDIT ADVANCE" shall mean the Bank's liability, direct or contingent,
for or arising under Letter of Credit No. LC-017478-DY, issued by Bank.
E. "LETTER OF CREDIT" shall have the meaning ascribed to such term under
Article 5 of the Michigan Uniform Commercial Code, as amended from time
to time, as supplemented by the Uniform Customs and Practice for
Documentary Credits, ICC Publication 500, as amended from time to time,
PERTAINING TO LETTER OF CREDIT NO. LC-017478-DY.
F. "NET SALE PROCEEDS FROM CHF" SHALL MEAN CHF SALE PROCEEDS NET OF
EXPENSES AND CAPITAL GAINS TAXES.
IN WITNESS WHEREOF, the parties have executed this Addendum on this
12TH day of MARCH , 1998, EFFECTIVE AS OF FEBRUARY 1, 1998.
BORROWER:
UNITED AMERICAN HEALTHCARE
CORPORATION,
a MICHIGAN CORPORATION
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Its: Chief Executive Officer
AND
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Interim Chief Financial Officer
BANK
MICHIGAN NATIONAL BANK,
a NATIONAL BANKING ASSOCIATION
By:_________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Corporate Asset Manager
- 3 -
13
PROMISSORY NOTE
(LINE OF CREDIT)
THIS PROMISSORY NOTE (LINE OF CREDIT) AMENDS, RESTATES AND INCREASES,
WITHOUT NOVATION OR SATISFACTION, AN AMENDED AND RESTATED PROMISSORY
NOTE (LINE OF CREDIT NOTE), NOTE NO. 02007144, DATED OCTOBER 30, 1997
$22,944,205.00 Note No.: __________________
FARMINGTON HILLS, MICHIGAN
Due Date: OCTOBER 1, 1999 Dated: MARCH 12, 1998,
EFFECTIVE FEBRUARY 1, 1998
FOR VALUE RECEIVED on the Due Date, the undersigned, jointly and
severally (the "Borrower"), promise to pay to the order of MICHIGAN NATIONAL
BANK, a NATIONAL BANKING ASSOCIATION (the "Bank"), at its office set forth
below or at such other place as Bank may designate in writing, the principal
sum of TWENTY TWO MILLION NINE HUNDRED FORTY FOUR THOUSAND TWO HUNDRED FIVE AND
00/100 DOLLARS ($22,944,205.00), UNTIL JULY 31, 1998, AT WHICH TIME THE
PRINCIPAL SUM SHALL NOT EXCEED TWENTY TWO MILLION FOUR HUNDRED FORTY FOUR
THOUSAND TWO HUNDRED FIVE AND 00/100 DOLLARS ($22,444,205.00) or such lesser
sum as shall have been advanced by Bank to Borrower under the loan account
hereinafter described, plus interest as hereinafter provided, all in lawful
money of the United States of America. The unpaid principal balance of this
promissory note ("Note") shall bear interest computed upon the basis of a year
of 360 days for the actual number of days elapsed in a month, at a rate of
interest (the "Effective Interest Rate") which is equal to:
That rate of interest established by BANK as its PRIME RATE (the
"Index"), as such Index may vary from time to time, THROUGH OCTOBER
31, 1998. IF BORROWER HAS NOT PERMANENTLY REDUCED THE PRINCIPAL
BALANCE TO EIGHT MILLION AND 00/100 DOLLARS ($8,000,000.00), ON OR
BEFORE NOVEMBER 1, 1998, THEN THE RATE OF INTEREST SHALL THEN BE
INCREASED TO EQUAL ONE PERCENT (1.00%) PER ANNUM IN EXCESS OF BANK'S
PRIME RATE. FURTHER, IF BORROWER HAS NOT PERMANENTLY REDUCED THE
PRINCIPAL BALANCE TO EIGHT MILLION AND 00/100 DOLLARS
($8,000,000.00), ON OR BEFORE FEBRUARY 1, 1999, THEN THE RATE OF
INTEREST SHALL THAN BE INCREASED TO EQUAL TWO PERCENT (2.00%) PER
ANNUM IN EXCESS OF BANK'S PRIME RATE UNTIL THE DUE DATE. Borrower
understands and agrees that the Effective Interest Rate payable to
Bank under this Note shall be determined by reference to the Index and
not by reference to the actual rate of interest charged by the Bank to
any particular borrower(s). If the Index shall be increased or
decreased, the Effective Interest Rate under this Note shall be
increased or decreased by the same amount, effective upon the day of
each increase or decrease in the Index.
Interest on all principal amounts advanced by Bank from time to time
and unpaid by Borrower shall be paid on the FIRST day of APRIL, 1998, and on
the FIRST day of each MONTH thereafter.
Advances of principal, repayment, and readvances may be made under this
Note AS SET FORTH IN THE BUSINESS LOAN AGREEMENT ADDENDUM (LINE OF CREDIT WITH
LETTER OF CREDIT ADVANCES), SECTION IV. ADVANCE REQUIREMENT, from time to time,
but Bank, in its sole discretion, may refuse to make advances or readvances
hereunder during any period(s) this Note is in default. All advances made
hereunder shall be charged to a loan account in Borrower's name on Bank's
books, and Bank shall debit to such account the amount of each advance made to,
and credit to such account the amount of each repayment made by Borrower. From
time to time, Bank shall furnish Borrower a statement of Borrower's loan
account, which statement shall be deemed to be correct, accepted by, and
binding upon Borrower, unless Bank receives a written statement of exceptions
from Borrower within ten (10) days after such statement has been furnished.
This Note may be paid in full or in part at any time without payment of
any prepayment fee. All payments received shall, at the option of the Bank,
first be applied against accrued and unpaid interest and the balance against
principal. Borrower expressly assumes all risks of loss or delay in the
delivery of any payments made by mail, and no course of conduct or dealing
shall affect Borrower's assumption of these risks. Borrower shall not be
required to pay interest at a rate greater than the maximum allowed by law and
any interest payment received by Bank which exceeds the maximum legal rate
shall be automatically credited upon the unpaid principal balance of this Note.
If the Bank determines the Effective Interest Rate is, or may be, usurious or
otherwise limited by law, the unpaid balance of this Note shall, at Bank's
option, become immediately due and payable.
Upon the occurrence of any of the Events of Default DESCRIBED IN THE
AMENDED AND RESTATED BUSINESS LOAN AGREEMENT EXECUTED CONTEMPORANEOUSLY
HEREWITH, the Bank, at its option, and without FURTHER notice to Borrower, may
declare the entire unpaid principal balance of this Note and all accrued
interest, together with all other indebtedness of Borrower to Bank, to be
immediately due and payable.
14
Upon the occurrence of any Event of Default, or upon non-payment of
this Note after demand, the unpaid principal balance of this Note shall bear
interest at a rate which is two percent (2%) greater than the Effective
Interest Rate otherwise applicable. HOWEVER, IF BORROWER HAS NOT PERMANENTLY
REDUCED THE AMOUNT OF THE LOAN TO EIGHT MILLION AND 00/100 DOLLARS
($8,000,000.00) ON OR BEFORE NOVEMBER 1, 1998, UPON THE OCCURRENCE OF ANY EVENT
OF DEFAULT THIS NOTE SHALL BEAR INTEREST AT A RATE WHICH IS THREE PERCENT (3%)
GREATER THAN THE EFFECTIVE INTEREST RATE OTHERWISE APPLICABLE. FURTHERMORE, IF
BORROWER HAS NOT PERMANENTLY REDUCED THE AMOUNT OF THE LOAN TO EIGHT MILLION
AND 00/100 DOLLARS ($8,000,000.00) ON OR BEFORE FEBRUARY 1, 1999, UPON THE
OCCURRENCE OF ANY EVENT OF DEFAULT, BUT NOT AS A RESULT OF THE SALE OF
SUBSIDIARY AND APPLICATION OF PROCEEDS AS STATED IN THE BUSINESS LOAN AGREEMENT
ADDENDUM (LINE OF CREDIT WITH LETTER OF CREDIT ADVANCES), SECTION IV.C.,
EXECUTED CONTEMPORANEOUSLY HEREWITH, THIS NOTE SHALL BEAR INTEREST AT A RATE
WHICH IS FOUR PERCENT (4%) GREATER THAN THE EFFECTIVE INTEREST RATE OTHERWISE
APPLICABLE. If any payment under this Note is not paid within ten (10) days
after the date due, at the option of Bank a late charge of not more than five
cents ($.05) for each dollar of the installment past due may be charged by
Bank. In addition to any other security interest granted, Borrower hereby
grants Bank a security interest in all of Borrower's bank deposits,
instruments, negotiable documents, and chattel paper which at any time are in
the possession or control of Bank, and after the occurrence of any Event of
Default, Bank may apply its own indebtedness or liability to Borrower or any
guarantor to any indebtedness due under this Note. Borrower agrees to pay all
of the Bank's costs incurred in the collection of this Note, including
reasonable attorney fees.
Acceptance by Bank of any payment in an amount less than the amount
then due shall be deemed an acceptance on account only, and Bank's acceptance
of any such partial payment shall not constitute a waiver of Bank's right to
receive the entire amount due. Borrower and all guarantors of this Note do
hereby (I) jointly and severally waive presentment for payment, demand, notice
of non-payment, notice of protest or protest of this Note, any defenses under
3-605 of the Michigan Uniform Commercial Code, the release of any collateral or
part thereof, with or without substitution, and Bank diligence in collection or
bringing suit, and (ii) do hereby consent to any and all extensions of time,
renewals, waivers or modifications as may be granted by Bank with respect to
payment or any other provisions of this Note. The liability of the Borrower
under this Note shall be absolute and unconditional, without regard to the
liability of any other party. This Note shall be deemed to have been executed
in Michigan, and all rights and obligations hereunder shall be governed by the
laws of the State of Michigan.
This Note is secured by:
AMENDED AND RESTATED BUSINESS LOAN AGREEMENT DATED MARCH 12, 1998,
EFFECTIVE FEBRUARY 1, 1998
PLEDGE AGREEMENT DATED MARCH 12, 1998, EFFECTIVE FEBRUARY 1, 1998
Reference is hereby made to the document(s) and agreement(s) described
above (the "Related Documents") for additional terms and conditions relating to
this Note.
BORROWER:
UNITED AMERICAN HEALTHCARE
CORPORATION ,
a MICHIGAN CORPORATION
BORROWER ADDRESS:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇ By:_________________________________
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
Its: Chief Executive Officer
AND
By:_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Interim Chief Financial Officer
Tax ID No.: ▇▇-▇▇▇▇▇▇▇
BANK ADDRESS:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ [10-60]
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
- 2 -
