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AMENDMENT NO. 4
Dated as of December 24, 1997
This AMENDMENT among U.S. HOMECARE CORPORATION AND ITS SUBSIDIARIES
LISTED IN ANNEX 1 HERETO (collectively, the "Borrowers" and each, individually,
a "Borrower"), the banks parties to the Credit Agreement referred to below (the
"Banks"), and THE CHASE MANHATTAN BANK (successor by merger to The Chase
Manhattan Bank, N.A.), as agent (the "Agent") for the Banks thereunder.
PRELIMINARY STATEMENT.
A. The Borrowers, the Banks and the Agent have entered into an
Amended and Restated Credit Agreement dated as of October 6, 1995, as amended
by Amendment No. 1 dated as of October 31, 1996, Amendment No. 2 dated as of
November 14, 1996, and Amendment No. 3 dated as of March 25, 1997 (said Credit
Agreement, as so amended, being hereinafter referred to as the "Credit
Agreement"; the terms defined therein being used herein as therein defined
unless otherwise defined herein).
B. Pursuant to the Credit Agreement, the Borrowers are indebted to
the Banks under the Notes in the aggregate principal amount of $4,280,230.13,
as of the date hereof (the "Indebtedness"), which Indebtedness is owed by the
Borrowers to the Banks without offset, defense or counterclaim of any kind,
nature or description. As security for such Indebtedness, the Borrowers have
heretofore granted to the Banks a first priority security interest in all the
Borrowers' assets (such security interest having been partially released by the
Banks pursuant to the Partial Release Letter dated November 8, 1993), whether
now owed or hereafter acquired, wherever located of any kind, nature or
description, tangible or intangible, including without limitation, the
Borrowers' accounts receivable, inventory, equipment, and general intangibles,
and such security interests and liens granted by the Borrowers to the Banks
are, subject to the terms of the Partial Release Letter, hereby reacknowledged
and confirmed by the Borrowers.
C. The Borrowers, the Banks and the Agent have agreed to amend the
Credit Agreement as hereinafter set forth.
SECTION 1. Amendments. The Credit Agreement is, effective as of
the date hereof and subject to the satisfaction of the conditions precedent
set forth in Section 2 hereof, hereby amended as follows:
(a) The following definition contained in Section 1.1 of the
Credit Agreement is amended and restated in full to read as follows:
"Termination Date" means (i) March 31, 1998; provided that
if such date is not a Banking Day, the Termination Date shall be the
next succeeding Banking Day, or (ii) the earlier date of termination
in whole of the Commitments pursuant to Section 2.7 or Section 9.2,
or otherwise.
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(b) Paragraph (a) of the definition of Borrowing Base contained in
Section 1.1 of the Credit Agreement is amended and restated in full to read as
follows:
(a) the lesser of (i) 85% of Eligible Receivables or (ii)
$5,750,000; plus
(c) For financial reporting periods ending on and before December 31,
1997, Article 8 shall remain unchanged. Commencing with financial reporting
periods ending after December 31, 1997, Article 8 is amended and restated in
its entirety to read as follows:
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall
have any Commitment under this Agreement:
Section 8.1. MINIMUM EARNINGS. The Borrowers shall maintain on a
consolidated basis at all times as of the end of each calendar month
EBITDA of not less than 90% of the projected EBITDA for such month as
set forth in the Borrowers' 1998 Business Plan.
Section 8.2. CAPITAL EXPENDITURES. The Borrowers shall not make or
permit to be made Consolidated Capital Expenditures during any calendar
month to exceed in the aggregate $50,000.
Section 8.3. INTEREST COVERAGE RATIO. The Borrowers shall maintain
at all times as of the end of each calendar month on a consolidated
basis an Interest Coverage Ratio of not less than 2.5 to 1.0.
(d) Subsection (d) of Section 2.11 is amended and restated in full to
read as follows:
(d) EXTENSION FEE. The Borrowers shall pay to the Agent for the
ratable benefit of the Banks an extension fee in the amount of $35,000,
which shall be fully earned by the Banks on March 31, 1997, and which
shall be payable on the earlier to occur of (i) January 2, 1998, or (ii)
the Termination Date. The Borrowers shall pay to the Agent for the
ratable benefit of the Banks an extension fee in the amount of $20,000,
which shall be fully earned by the Banks on January 2, 1998, and which
shall be payable on the Termination Date.
SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, the Agent shall have received counterparts of
this Amendment executed by the Borrowers and all of the Banks, except that
Section 1 hereof shall become effective when, and only when, the Agent shall
have additionally received all of the following documents, each document (unless
otherwise indicated) being dated the date of receipt thereof by the Agent (which
date shall be the same for all such documents), in form and substance
satisfactory to the Banks:
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(a) Certified copies of (i) the resolutions of the Board of Directors
or Executive Committee of each Borrower approving this Amendment and the
matters contemplated hereby, (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Amendment and the matters contemplated hereby, (iii) all waivers and amendments
with respect to the Junior Debt concerning the matters covered by this
Amendment, which shall include an amendment to the Junior Debt documents
extending the maturity date thereof to April 15, 1998, and (iv) an executed copy
of Amendment No. 4 to Receivables Purchase and Servicing Agreement extending
the maturity date of the Purchase Agreement to March 31, 1998 and in form and
substance satisfactory to the Banks.
(b) A certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of the officers of such
Borrower authorized to sign this Amendment and the other documents to be
delivered hereunder.
(c) A favorable opinion of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, counsel for
the Borrowers, to the effect that this Amendment and each and every other
document delivered by any of the Borrowers have been duly authorized, executed
and delivered by such Borrowers, and constitute the legal, valid and binding
obligations of such Borrowers, enforceable against such Borrowers in accordance
with their respective terms, and to such other matters as the Agent may
reasonably require.
(d) A certificate signed by a duly authorized officer of each Borrower
stating that:
(i) The representations and warranties contained in Section 3
hereof are correct on and as of the date of such certificate as though
made on and as of such date, and
(ii) After giving effect to the terms of the Amendment, no event
has occurred and is continuing which constitutes a Default or an Event
of Default.
(e) Results of a recent field examination by the Banks of the
Borrowers' assets, liabilities, books and records that are satisfactory to the
Banks in their sole discretion.
(f) A 1998 Business Plan (forecasted on a monthly basis).
(g) Payment of a $40,000 extension fee to the Agent for the ratable
benefit of the Banks, which shall be fully earned by the Banks on the date so
paid.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each
Borrower represents and warrants as follows:
(a) Such Borrower is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation.
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(b) The execution, delivery and performance by such Borrower of this
Amendment and the Facility Documents, as amended hereby, to which it is or is
to be a party are within such Borrower's corporate powers, have been duly
authorized by all necessary corporate action and do not contravene (i) such
Borrower's charter or by-laws, (ii) any contractual restriction binding on or
affecting such Borrower, or result in, or require, the creation or imposition
of any mortgage, deed of trust, pledge, lien, security interest or other
charge, encumbrance or preferential arrangement of any nature upon or with
respect to any of the properties now owned of hereafter acquired by such
Borrower, or (iii) to the best of such Borrower's knowledge, any law.
(c) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for the
due execution, delivery and performance by such Borrower of this Amendment or
any of the Facility Documents, as amended hereby, to which it is or is to be a
party.
(d) This Amendment and each of the other Facility Documents as amended
hereby, to which such Borrower is a party constitute legal, valid and binding
obligations of such Borrower enforceable against such Borrower in accordance
with their respective terms.
(e) To the best of such Borrower's knowledge, the Security Agreement
constitutes valid and perfected first priority security interests and liens in
an to the Collateral covered thereby enforceable against all third parties in
all jurisdictions and secure the payment of all obligations of such Borrower
under the Facility Documents, as amended hereby, and the execution, delivery
and performance of this Amendment do not adversely affect the aforesaid
security interests and liens of such Security Agreement.
(f) Except as set forth on Schedule 3(f), there is no pending or
threatened action or proceeding affecting such Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of such
Borrower or any Subsidiary or which purport to affect the legality, validity or
enforceability of this Amendment or any of the other Facility Documents, as
amended hereby.
(g) After giving effect to the terms of the Amendment, no event has
occurred and is continuing which constitutes a Default or an Event of Default.
SECTION 4. Reference to and Effect on the Facility Documents.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof each reference in the Credit Agreement to "this Agreement," "hereunder,"
"hereof" "herein" or words of like import, and each reference in any Facility
Documents to the Credit Agreement or any other Facility Document as amended
hereby.
(b) Except as specifically amended above, the Credit Agreement and the
other Facility Documents shall remain in full force and effect and are hereby
ratified and
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confirmed. Without limiting the generality of the foregoing, the Pledge
Agreements and all of the Pledged Collateral described therein, and the Security
Agreement and all of the Collateral described therein, do and shall continue to
secure the payment of all Obligations, in each case as amended hereby.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Agent or any Bank under any of the Facility Documents,
nor constitute a waiver of any provision of any of the Facility Documents.
(d) The Agent and the Banks are under no obligation to enter into this
Amendment. The Agent's and the Banks' entering into this Amendment shall
not be deemed to limit or hinder any rights of the Agent or any Bank under the
Credit Agreement, nor shall it be deemed to create or infer a course of dealing
between the Agent or any Bank and the Parent or any of the other Borrowers with
regard to any provision of the Credit Agreement.
SECTION 5. Costs, Expenses and Taxes. The Borrowers jointly and
severally agree to pay on demand all costs and expenses of the Agent and the
Banks in connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Agent and the Banks with respect thereto and with respect to
advising the Agent and the Banks as to their rights and responsibilities
hereunder and thereunder. The Borrowers further jointly and severally agree to
pay on demand all costs and expenses, if any (including, without limitation,
reasonable counsel fees and expenses), in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, reasonable counsel fees and expenses in
connection with the enforcement of rights under this Section 5. In addition,
the Borrowers shall pay any and all stamp and other taxes payable or determined
to be payable in connection with the execution and delivery of this Amendment
and the other instruments and documents to be delivered hereunder, and agrees
to save the Agent and the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes.
SECTION 6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument.
SECTION 7. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
U.S. HOMECARE CORPORATION AND ITS
SUBSIDIARIES LISTED ON ANNEX 1 HERETO
By: /s/ Xxxxxxxx X. Xxxxxxx
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Name:
Vice President of each of the above
corporations
BANKS:
THE CHASE MANHATTAN BANK (successor by
merger to The Chase Manhattan Bank, N.A.)
By: /s/ Xxxx Xxxxxxxxx V.P.
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Xxxx Xxxxxxxxx
Vice President
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ X.X. Xxxxxx
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Name: X.X. Xxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
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AGENT:
THE CHASE MANHATTAN BANK (successor by
merger to The Chase Manhattan Bank, N.A.)
By: /s/ Xxxx Xxxxxxxxx V.P.
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Xxxx Xxxxxxxxx
Vice President
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ANNEX 1
U.S. HOMECARE CORPORATION, AFFILIATED HOME CARE OF WESTCHESTER, INC., U.S.
HOMECARE CORPORATION OF NORTHERN WESTCHESTER, U.S. HOMECARE CORPORATION OF
MANHATTAN, U.S. HOMECARE CORPORATION OF THE BRONX, U.S. HOMECARE CERTIFIED
CORPORATION OF NEW YORK, U.S. HOMECARE CORPORATION OF ALBANY, U.S. HOMECARE
INFUSION THERAPY SERVICES CORPORATION OF NEW JERSEY, U.S. HOMECARE CORPORATION
OF CONNECTICUT, U.S. HOMECARE CERTIFIED CORPORATION OF CONNECTICUT, U.S.
HOMECARE CORPORATION OF PENNSYLVANIA, U.S. HOMECARE CERTIFIED CORPORATION OF
PENNSYLVANIA, U.S. HOMECARE INFUSION THERAPY PRODUCTS CORPORATION
