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EXHIBIT 4.3(i)
Michigan Corporate Special Assets (10-60)
National 00000 Xxxxxxx Xxxx
Xxxx Xxxxxxxxxx Xxxxx, XX 00000-0000
February 26, 1997
Xx. Xxxx X. Xxx
Chief Financial Officer
Universal Standard Medical Laboratories, Inc.
00000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Waiver of December 31, 1996 Loan Covenants
Dear Xx. Xxx:
On February 6, 1997, Michigan National Bank, a national banking
association (the "Bank") and Universal Standard Medical Laboratories, Inc., a
Michigan corporation (the "Borrower") entered into a Second Amended and
Restated Business Loan Agreement. Pursuant to the Loan Agreement, Bank has
extended to Borrower the following loans:
1. Line of Credit in the amount of Five Million, Five Hundred
Thousand and 00/100 Dollars ($5,500,000.00);
2. Term Loan in the amount of Six Million and 00/100 Dollars
($6,000,000.00);
3. Letter/Line of Credit-B in the amount Fifty Thousand and
00/100 Dollars ($50,000.00).
The loans described in the Loan Agreement shall be referred to in this letter
as the "Loans." The Loans are secured by certain collateral described in
Section V of the Loan Agreement.
Section III.A.2 of the Loan Agreement requires Borrower to maintain
its ratio of Funded Debt to Cash Flow to be not more than 3.0 to 1.0. Section
III.A.3. of the Loan Agreement requires Borrower to maintain a Current Ratio of
not less than 1.50 to 1.00. Borrower has notified Bank that it expects to
violate each of these financial covenants for the fourth quarter of 1996 due to
special restructuring charges and treatment of Deferred Taxes under GAAP
requirements. Xxxxxxxx has requested that Bank waive the defaults caused by
the violation of these covenants. Bank is willing to waive these defaults,
subject to the terms and conditions of this letter.
1. Capitalized terms not defined herein shall have the meaning
given to them in the Loan Agreement.
2. Subject to the Borrower's consent to the conditions in this
letter, Bank waives the defaults which are described in this
letter. Nothing in this letter shall be deemed to constitute
a waiver of (i) any future defaults in the financial covenants
contained in Section III.A. of the Loan Agreement or (ii) of a
default in any other provision of the Loan Agreement or any
Related Documents.
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3. Except as described in this letter, the Loan Agreement and
Related Documents will remain in full force and effect. All
collateral securing the Loans will continue to secure the
Loans.
4. The modifications described in this letter shall not
constitute the establishment of a course of dealing between
the parties. Bank reserves, and Borrower expressly
acknowledges that Bank has the right to deny any future
request for modification or waiver of any of the provisions of
the Loan Agreement or the Related Documents.
5. The effectiveness of the modifications contained in this
letter are expressly conditioned on the receipt of a waiver
fee in the amount of $5,000 or payment in full of all
outstanding Indebtedness of Borrower by March 7, 1997.
6. This letter agreement shall be governed by and construed in
accordance with the laws of the State of Michigan. This
letter may be modified only by a written instrument signed by
both parties to this letter.
If this letter accurately reflects the understanding of the parties,
please execute the letter in the indicated place and return it to me.
Very truly yours,
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Corporate Asset Manager
This letter accurately reflects the understanding of the parties.
Universal Standard Medical Laboratories, Inc.
By: /s/ Xxxx X. Xxx Date: 2/26/97
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Xxxx X. Xxx
Its: Vice President - Finance and Treasurer
