AMENDMENT NO. 3 TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment No. 3") is made as of the 13th day of February, 1998 by and
among HOME HEALTH CORPORATION OF DELAWARE, INC., a Delaware corporation
("Borrower"); CORESTATES BANK, N.A., a national banking association
("CoreStates") and the other banks identified on the signature pages hereto
(each individually a "Bank" and individually and collectively, "Banks"); and
CoreStates as agent for the Banks ("Agent").
WITNESSETH:
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WHEREAS, Borrower, Banks and Agent are parties to that certain Third
Amended and Restated Credit Agreement dated March 13, 1997, as amended (as
amended from time to time, including by this Amendment No. 3, the "Credit
Agreement"); and
WHEREAS, Home Health Corporation of America, Inc. ("Parent") and
certain of its subsidiaries other than Borrower have executed (or joined in)
that certain Amended and Restated Guaranty dated March 13, 1997 (as amended from
time to time, the "Guaranty") in favor of Banks in connection with the Credit
Agreement; and
WHEREAS, Borrower has requested, and the Banks have agreed to, subject
to the terms and conditions hereof, certain amendments and waivers under the
Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements
herein set forth and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Definitions
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a. General Rule. Unless otherwise defined herein, terms used
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herein which are defined in the Credit Agreement shall have the meanings
assigned to them in the Credit Agreement.
b. Additional Definition. The following definition is hereby
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added to Section 1 of the Credit Agreement to read in its entirety as follows:
"Amendment No. 3" shall mean the Amendment No. 3 to Credit Agreement
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by and among Borrower, Agent and Banks.
c. Amended Definition. The following definition set forth in
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Section 1 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
"EBITDA" means, for any period, the sum of net income for such period
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as defined in accordance with GAAP, plus (i) interest paid in cash, (ii)
original issue discount paid in cash, (iii) taxes, (iv) depreciation and
amortization, (v) charges related to extinguishment of debt, (vi) write-off
of expenses associated with the registration statement filed in November
1996 (not to exceed $300,000), (vii) charges associated with Permitted
Acquisitions accounted for as a pooling of interests for such period,
(viii) for any calculation thereof which includes the fiscal quarter ended
June 30, 1997, the amount of non-recurring charges taken during that
quarter and deducted in calculating net income (i.e., a $3.0 million charge
to reflect an increase in bad debt reserves and a $1.1 million
restructuring charge) and (ix) for any calculation thereof which includes
the fiscal quarter ended December 31, 1997, the write-off of goodwill and
the non-recurring restructuring and merger charges taken during that
quarter as reflected in the 10-Q for the Parent, in each case as defined in
accordance with GAAP and to the extent each has been deducted in
determining net income.
2. Amendment to Definition of Applicable Margin. Notwithstanding the
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definition of Applicable Margin set forth in Paragraph 2.6 of the Credit
Agreement, the Applicable Margin with respect to Libor Portions shall be 2.75%
and the Applicable Margin with respect to Base Rate Portions shall be 1.25%;
provided however, that if the ratio of Funded Debt to Adjusted EBITDA for Parent
and its consolidated Subsidiaries is less than or equal to 3.00 to 1 as of March
31, 1998 or is less than or equal to 2.75 to 1 as of June 30, 1998 or
thereafter, then effective on the day following delivery of the applicable
Compliance Certificate the Applicable Margin shall be calculated as set forth in
the Credit Agreement without regard to this Paragraph 2.
3. Amendment to Paragraph 5.15 (Maximum Funded Debt to Adjusted
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EBITDA Ratio). Paragraph 5.15 of the Credit Agreement is hereby amended and
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restated to read in its entirety as follows:
5.15 Maximum Funded Debt to Adjusted EBITDA Ratio. Maintain as of the
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end of each fiscal quarter during the periods set forth in the left hand
column below a ratio of (i) Funded Debt of Parent and its consolidated
Subsidiaries to (ii) Adjusted EBITDA, of not greater than the ratio set
forth in the right hand column below:
Period Ratio
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Date of the Credit Agreement
through 9/30/97 3.25 to 1
10/1/97 through 3/31/98 4.75 to 1
4/1/98 through 6/30/98 4.50 to 1
7/1/98 through 12/31/98 2.75 to 1
1/1/99 and thereafter 2.50 to 1
4. Amendment to Paragraph 5.17 (Maximum Leverage Ratio). Paragraph
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5.17 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
5.17 Maximum Leverage Ratio. Maintain as of the end of each fiscal
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quarter during the periods set forth in the left hand column below a ratio
of consolidated Funded Debt to consolidated Total Capitalization of not
greater than the ratio set forth in the right hand column below:
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Period Ratio
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Date of the Credit Agreement
through 9/30/97 0.65 to 1
10/1/97 through 6/30/98 0.80 to 1
7/1/98 through 3/31/99 0.55 to 1
4/1/99 and thereafter 0.50 to 1
5. Additional Reporting. In addition to any other information and
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reports required pursuant to the Credit Agreement, the Companies shall furnish
to Agent, on a monthly basis within twenty-five (25) days after the end of each
month a monthly visit trend report, profit and loss statement, cash collection
report, and accounts receivable aging, each in form and substance satisfactory
to Agent.
6. Waivers; Restrictions on Advances.
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x. Xxxxx hereby waive the defaults by Borrower under Paragraph
5.15 (Maximum Funded Debt to Adjusted EBITDA Ratio) and Paragraph 5.17 (Maximum
Leverage Ratio) as in effect prior to the date hereof; provided, that nothing
herein shall be construed as a waiver of any defaults under Paragraph 5.15 or
Paragraph 5.17, as amended hereby, or any other provisions of the Credit
Agreement.
x. Xxxxx hereby waive the requirements of Paragraph 5.5(b)
(relating to establishment and maintenance of reserves with respect to
receivables, and write-off of receivables) as of December 31, 1997 and through
June 30, 1998, provided, that nothing herein shall be construed as a waiver of
any default under such paragraph as of any date prior to December 31, 1997 or
after June 30, 1998, or any other provisions of the Credit Agreement. Borrower
shall submit a revised policy with respect to reserves and write-offs not later
than April 30, 1998. Banks shall be permitted to engage a third party to review
and audit such policy and the Companies compliance therewith at the expense of
Borrower. Such policy shall not replace the policy as in effect as of the date
of the Credit Agreement for purposes of Paragraph 5.5(b) of the Credit Agreement
unless and until Required Banks have agreed thereto in writing in their sole
discretion.
c. Unless and until Borrower is in compliance with Paragraph
5.15 and 5.17 of the Credit Agreement as in effect prior to this Amendment No.
3, (i) no Advance shall be made under the Acquisition Commitment, and (ii)
Borrower may not make any adjustment in the commitment amounts under Paragraph
2.1(e), except that Borrower may make one such adjustment from the Acquisition
Commitment to the Revolving Commitment in an amount not to exceed $8,000,000.
7. Amendment Fee. Borrower shall pay to each Bank that executes
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this Amendment No. 3 an amendment fee in the amount of 15 basis points on such
Bank's Maximum Principal Amount.
8. Representations and Warranties. Borrower and Guarantors hereby
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represent and warrant to Banks as follows:
a. Representations. The representations and warranties set
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forth in Section Three of the Credit Agreement (other than those made only as of
a specific date) are true and correct in all material respects as of the date
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hereof; no Event of Default or Default under the Credit Agreement is in
existence except as expressly waived pursuant to Paragraph 6 hereof; and there
has been no event or circumstance since March 13, 1997, which has caused or is
reasonably likely to cause a Material Adverse Effect.
b. Power and Authority; Enforceability. Borrower has the power
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and authority under the laws of its state of incorporation and its certificate
of incorporation and bylaws to enter into and perform, to the extent applicable
to it, this Amendment No. 3; and all actions necessary or appropriate for the
execution and performance by Borrower of this Amendment No. 3 have been taken
and upon their execution, the same will constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency and other similar laws
affecting the rights of creditors generally.
c. No Violation of Laws or Agreements. The making and
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performance of this Amendment No. 3 and actions required of Borrower hereunder
will not violate any provisions of any federal, state or local law or
regulation, or result in any breach or violation of, or constitute a default
under, any agreement by which Borrower or its property may be bound.
9. Conditions to Effectiveness of Amendment. This Amendment No. 3
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shall be effective upon Agent's receipt of the following documents and
satisfaction of the following conditions, each in form satisfactory to Banks:
a. Amendment No. 3. This Amendment No. 3, duly executed by
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Borrower, Guarantors, Banks and Agent.
b. Other Documents. Such additional documents as Agent shall
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reasonably request.
10. Affirmation. Borrower and Guarantors hereby affirm all of the
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provisions of the Credit Agreement, as amended (including by this Amendment No.
3) and the other Loan Documents and agree that the terms and conditions of the
Credit Agreement as amended (including by this Amendment No. 3) and the other
Loan Documents shall continue in full force and effect as supplemented and
amended hereby.
11. Miscellaneous.
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a. This Amendment No. 3 shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
b. Borrower agrees to reimburse Agent for all reasonable costs
and expenses (including but not limited to, reasonable attorneys' fees and
reasonable disbursements) which Agent may pay or incur in connection with the
preparation of this Amendment No. 3 and the preparation or review of other
documents executed or delivered in connection herewith.
c. All terms and provisions of this Amendment No. 3 shall be
for the benefit of and be binding upon and enforceable by the respective
successors and assigns of the parties hereto.
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d. This Amendment No. 3 may be executed in any number of
counterparts with the same effect as if all the signatures on such counterparts
appeared on one document and each such counterpart shall be deemed an original.
e. Except as expressly set forth in Paragraph 6 above, the
execution, delivery and performance of this Amendment No. 3 shall not effect a
waiver of any right, power or remedy of Agent or Banks under applicable law or
under the Credit Agreement and the agreements and documents executed in
connection therewith or constitute a waiver of any provision thereof.
IN WITNESS WHEREOF, the undersigned by their duly authorized officers,
have executed this Amendment No. 3, effective as of the day and year first
written above.
HOME HEALTH CORPORATION OF
Attest: DELAWARE, INC.
By:_______________________ By:_____________________________
Name: Name: Xxxxx Xxxxxxx
Title: Title: President
CORESTATES BANK, N.A., for itself and as Agent
By:_____________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:_____________________________
Name:
Title:
[EXECUTIONS CONTINUED]
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PNC BANK, NATIONAL ASSOCIATION
By:_____________________________
Name:
Title:
SUNTRUST BANK, CENTRAL FLORIDA,
N.A.
By: ____________________________
Name:
Title:
TORONTO DOMINION (NEW YORK), INC.
By:____________________________
Name:
Title:
FLEET NATIONAL BANK
By:-___________________________
Name:
Title:
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The undersigned Guarantors hereby acknowledge and agree to the foregoing
Amendment No. 3, affirm the representations set forth in Paragraph 7 thereof,
and agree that the Guaranty continues in full force and effect and guarantees
all obligations under the Credit Agreement, as amended thereby:
HOME HEALTH CORPORATION OF HOME HEALTH CORPORATION OF
AMERICA, INC. AMERICA, INC. - TAMPA NURSING
PENNSYLVANIA HOME HEALTH PENNSYLVANIA HOME HEALTH
SERVICES/PHILADELPHIA, INC. SERVICES/SUBURBAN, INC.
PENNSYLVANIA HOME HEALTH HHCA, INC. - DELAWARE
SERVICES/NORTHEAST, INC. HHCA - SERVICE CO.
PENNSYLVANIA HOME CARE, INC. HOME HEALTH CORPORATION OF
HOME CARE MEDICAL SUPPLY AND AMERICA, INC. - EASTERN SHORE
EQUIPMENT, INC. HOME HEALTH SYSTEMS, INC.
NUTRITIONAL HOME HEALTH HHCA TEXAS HOLDINGS, INC.
SERVICES, INC. HHCA TEXAS GP, INC.
ALL CARE HEALTH SERVICES, INC. HHCA TEXAS HEALTH SERVICES,
ALL-CARE HOME HEALTH L.P., by HHCA TEXAS GP, INC.,
SERVICES, INC. its general partner
HOME HEALTH CORPORATION OF HHCA TEXAS INFUSION SERVICES,
AMERICA, INC./FT. XXXXXX HOME L.P., by HHCA TEXAS GP, INC.,
HEALTH SERVICES its general partner
HHCD, INC. HHCA TEXAS PRIVATE NURSING
HHCDME, INC. SERVICES, L.P., by HHCA TEXAS GP,
PROFESSIONAL HOME HEALTH INC., its general partner
SERVICES, INC. HHCA TEXAS MEDICAL EQUIPMENT,
HOME HEALTH CORPORATION OF L.P., by HHCA TEXAS GP, INC.,
AMERICA, INC.-TAMPA its general partner
HOME HEALTH CORPORATION OF R.S.D. MANAGEMENT, INC.
AMERICA, INC.-TAMPA NURSING SERVICES HOME CARE,
DIAGNOSTIC SERVICES INC.
HOME HEALTH CORPORATION OF NURSING SERVICES HOME CARE,
AMERICA, INC. - PINELLAS LTD.
HOME HEALTH CORPORATION OF NURSING SERVICES STAFFING OF
AMERICA, INC.- ST. PETERSBURG N.H., INC.
(continued in next column) NURSING SERVICES, INC.
NAHATAN DRUG, INC.
By:_______________________ By:___________________________
Name: Name: Xxxxx Xxxxxxx
Title: Title: President
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