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AMENDMENT NO. 7
Dated as of March 16, 1999
This AMENDMENT among U.S. HOMECARE CORPORATION AND ITS SUBSIDIARIES
LISTED IN ANNEX 1 HERETO (collectively, the "Borrowers" and each, individually,
a "Borrower") and FLEET NATIONAL BANK (successor by merger to Fleet Bank,
National Association)(the "Bank").
PRELIMINARY STATEMENT.
A. The Borrowers and the Bank have entered into a Credit Agreement
dated as of October 6, 1995, as amended by Amendment No. 1 dated as of November
14, 1996, Amendment No. 2 dated as of March 25, 1997, Amendment No. 3 dated as
of December 24, 1997, Amendment No. 4 dated as of March 26, 1998, Amendment No.
5 dated as of January 15, 1999 and Amendment No. 6 dated as of February 16, 1999
(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
Bank under the Note in the aggregate principal amount of $3,000,000 as of the
date hereof (the "Indebtedness"), which Indebtedness is owed by the Borrowers to
the Bank without offset, defense or counterclaim of any kind, nature or
description. As security for such Indebtedness, the Borrowers have heretofore
granted to the Bank a second priority security interest in all the Borrowers'
assets (excluding certain health care receivables as more fully set forth in the
Security Agreement), 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 Bank are hereby reacknowledged and confirmed by the Borrowers.
C. The Borrowers and the Bank each hereby acknowledge that the
Borrowers have failed to comply with the covenants contained in Sections 7.1 and
7.3 of the Credit Agreement for the months of October, November and December of
1998 and for the months of January and February of 1999. As a result of such
noncompliance, Events of Default have occurred and are continuing under Section
8.1(c) of the Credit Agreement (the "Subject Events of Default"). The Borrowers
have requested that the Bank forbear, from March 16, 1999 through April 15,
1999, from exercising their available rights and remedies solely in connection
with the Subject Events of Default.
D. The Borrowers and the Bank have agreed to amend the Credit Agreement
as hereinafter set forth.
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SECTION Amendments.
(a) The Credit Agreement is, effective as of the date hereof and subject to
the satisfaction of the conditions precedent set forth in Section 3 hereof,
hereby amended as follows:
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) April 16, 1999 or such later date
that is set forth in any extension letter from the Bank to the
Borrowers from time to time; 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 2.6 or Section 8.2, or otherwise.
(b) The Note is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, hereby
amended as follows:
(c) The following definition contained in Section 1(ix) of the Note is
amended and restated in full to read as follows:
(d) (ix) "Termination Date" means April 16, 1999.
SECTION Forbearance and Extensions.
(a) From March 16, 1999 until and including April 15, 1999, and subject to
the satisfaction of the conditions precedent set forth in Section 3 hereof, the
Bank hereby agrees to forbear from pursuing its available rights and remedies
solely in connection with the Subject Events of Default, except that the Bank
may, in its sole discretion, refuse to make any additional Loan or Loans during
such period. Notwithstanding the satisfaction by the Borrowers of any conditions
precedent to the making of Loans under the Credit Agreement, nor any provision
of the Credit Agreement or the other Facility Documents to the contrary, the
Borrowers acknowledge that the Bank is not under any commitment to make any
Loans to the Borrowers and the decision to make each Loan is subject to the sole
discretion of the Bank. During the forbearance period, the Borrowers shall
diligently pursue effectuating a binding agreement in connection with any
existing letters of intent for the sale of all or substantially all of the
assets and/or business of the Borrowers to a non-affiliated third party. If such
letters of intent shall terminate prior to the effectiveness of a binding
agreement, then the Borrowers shall use their reasonable best efforts during the
forbearance period to provide to the Bank and the Guarantor, in form and
substance satisfactory to the Bank and the Guarantor, photocopies of new
executed letters of intent for the sale of all or substantially all of the
assets and/or business of the Borrowers to a non-affiliated third party.
(b) In accordance with the Letter Waiver by and among the Borrowers and the Bank
dated November 13, 1998 (the "Letter Waiver"), the Borrowers were to provide the
Bank and the
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Guarantor, (i) not later than December 1, 1998, with management-prepared 1999
projected financial statements (the "Projections"), and (ii) not later than
December 15, 1998, with a written report from X.X. Xxxxxx, certified public
accountants (the "Accountants"), detailing the results of their review of the
Projections. The Bank did not receive such Projections until on or about
December 15, 1998, and the Bank has not yet received the report from the
Accountants. The Bank reserves its rights and remedies with respect to the
failure of the Borrowers to comply with the foregoing terms of the Letter
Waiver, and nothing contained herein shall constitute a waiver by the Bank of
such rights and remedies.
(c) Nothing contained herein shall prejudice any rights or remedies the
Bank may have to exercise its rights and remedies with respect to the Subject
Events of Default after April 15, 1999, or, on any future date, to declare the
Borrowers to be out of compliance with any term or provision of the Credit
Agreement, for any reason other than the Subject Events of Default, or prevent
the Bank now or hereafter from pursuing any of their available remedies in
connection with any Default or Event of Default under the Credit Agreement,
other than the Subject Events of Default.
SECTION Conditions of Effectiveness. This Amendment shall become
effective when, and only when, the Bank shall have received counterparts of this
Amendment executed by the Borrowers and the Bank and the consent hereto executed
by the Guarantor, except that Section 1 and Section 2 hereof shall become
effective when, and only when, the Bank shall have additionally received (i)
true photocopies of the executed originals of an Amendment No. 8 to Receivables
Purchase and Servicing Agreement extending the maturity date of the Purchase
Agreement to April 5, 1999 and in form and substance satisfactory to the Bank
and the Guarantor, (ii) true photocopies of the executed originals of all
waivers and amendments with respect to the Senior Debt (as defined in the
Intercreditor Agreement) concerning the matters covered by this Amendment, which
shall include an amendment to the Senior Debt documents extending the maturity
date thereof to Xxxxx 0, 0000, (xxx) a fully executed amendment to the Guarantee
extending the termination date thereof to a date no earlier than April 30, 1999
and (iv) weekly cash flow projections for the nine-month period commencing March
1, 1999, in form and substance satisfactory to the Bank and the Guarantor.
SECTION 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.
(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
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arrangement of any nature upon or with respect to any of the properties now
owned or 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 second priority security interests and liens in
and 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 4(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 Reference to and Effect on the Facility Documents.
(a) Upon the effectiveness of this Amendment, 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, shall mean and
be a reference to the Credit Agreement or such 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 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 (as defined in the Pledge
Agreement and the Security Agreement respectively), in each case as amended
hereby.
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(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 Bank or the Guarantor under any of the Facility Documents, nor
constitute a waiver of any provision of any of the Facility Documents.
(d) The Bank is under no obligation to enter into this Amendment. The
Bank's entering into this Amendment shall not be deemed to limit or hinder any
rights of the Bank or the Guarantor under the Credit Agreement, nor shall it be
deemed to create or infer a course of dealing between the Bank and the Parent or
any of the other Borrowers with regard to any provision of the Credit Agreement.
SECTION Costs, Expenses and Taxes. The Borrowers jointly and severally
agree to pay on demand all costs and expenses of the Bank and the Guarantor 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 Bank and the Guarantor with respect thereto and with respect to advising
the Bank and the Guarantor 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. 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 Bank
and the Guarantor 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 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 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
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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:
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Name:
of each of the above corporations
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Bank:
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FLEET NATIONAL BANK (successor by merger to
Fleet Bank, National Association)
By:
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Xxxxxxxxxxx X. Xxxx
Vice President
CONSENT OF GUARANTOR
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The Guarantor hereby consents to the execution of the foregoing Amendment by the
Bank and to the terms and conditions contained therein.
CONNECTICUT DEVELOPMENT AUTHORITY
By
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Its
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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
