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AMENDMENT NO. 2
Dated as of March ____, 1997
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 (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 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 have agreed to amend the
Credit Agreement as hereinafter set forth.
SECTION 1. 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 2 hereof, hereby amended as follows:
(i) The following definitions contained in
Section 1.1 of the Credit Agreement are
amended and restated in full to read as
follows:
"Current Liabilities" means all liabilities
of the Borrowers treated as current liabilities in
accordance with GAAP, including without limitation
(a) all obligations payable on demand or within one
year after the date in which the determination is
made and (b) installment and sinking fund payments
required to be made within one year after the date on
which determination is made, but excluding (i) the
Restructuring Reserve, (ii) current maturities of
long term debt (including the Senior Debt (as defined
in the Intercreditor Agreement) and debt under this
Agreement), and (iii) all such liabilities or
obligations which are renewable or extendable at the
option of any Borrower to a date more than one year
from the date of determination.
"Interest Coverage Ratio" shall mean, for
any Person, as at the end of any fiscal quarter, the
ratio of (a) to (b) where (a) is equal to (i) EBITDA
(but not including in such calculation any
adjustments included in EBITDA during the relevant
period, with respect to any prior periods, relating
to Medicare/Medicaid, discontinued operations or
other matters of such Person) of such Person for such
fiscal quarter, less (ii) Capital Expenditures of
such Person for such fiscal quarter, and (b) is equal
to the Interest Expense of such Person for such
fiscal quarter.
"Termination Date" means (i) January 15,
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 2.6 or Section 8.2, or otherwise.
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(ii) Article 7 is amended and restated in its
entirety to read as follows:
ARTICLE 7. FINANCIAL COVENANTS.
So long as the Note shall remain unpaid or the Bank
shall have any Commitment under this Agreement:
Section 7.1 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'
business plan dated October 23, 1996.
Section 7.2 Capital Expenditures. The Borrowers shall
not make or permit to be made Consolidated Capital
Expenditures during any fiscal year of the Borrowers to exceed
in the aggregate $500,000.
Section 7.3 Current Ratio. The Borrowers shall
maintain at all times as of the end of each fiscal quarter a
ratio of Consolidated Current Assets to Consolidated Current
Liabilities of not less than 1.25 to 1.0.
Section 7.4 Interest Coverage Ratio. The Borrowers
shall maintain at all times as of the end of each fiscal
quarter on a consolidated basis an Interest Coverage Ratio of
not less than 2.5 to 1.0.
(iii) A new Section 5.12 is added as follows:
Section 5.12 Amendment to Purchase Agreement. By
March 31, 1997, enter into an amendment to the Purchase
Agreement extending the maturity date thereof to January 2,
1998, which amendment shall modify the Purchase Agreement
consistent with the terms of that certain memorandum Re: Terms
and Conditions Addendum for Contract Extension to U.S.
HomeCare Receivables Purchasing Program, dated March 12, 1997,
by and between The Chase Manhattan Bank and the Parent and
which amendment shall be satisfactory to the Bank and the
Guarantor.
(iv) A new Section 5.13 is added as follows:
Section 5.13. Corporate Status. By April 30, 1997,
with respect to each of U.S. Homecare Medical Equipment Corp.,
U.S. Homecare Infusion Therapy Products Corporation, U.S.
HomeCare Infusion Therapy Services Corporation of Connecticut,
U.S. Homecare Corporation of the MidAtlantic Region and U.S.
Homecare Corporation of Michigan (the "Inactive Borrowers"),
either (i) take affirmative steps to cause such Inactive
Borrower's dissolution or (ii) cause such Inactive Borrower to
be in good standing under the laws of its jurisdiction of
incorporation and each other state in which it is required to
qualify to do business as a foreign corporation, and provide
copies of good standing certificates from the relevant states
to the Bank. As soon as available, the Borrowers will provide
the Bank with copies of certificates of dissolution for each
of the Inactive Borrowers dissolved in accordance with clause
(i) of this Section 5.13.
(v) Subsection 5.8 (m) is deleted in its
entirety, and the following subsections
relettered accordingly.
(vi) The corporations listed on Schedule 1(a)(vi)
to this Amendment (the "Dissolved
Borrowers") shall cease to be "Borrowers"
under the Credit Agreement and the other
Facility Documents in all respects.
Notwithstanding the foregoing, the Bank
shall have no obligation to release its
security interests in and security interest
filings against the assets of the Dissolved
Borrowers, and nothing contained herein
shall be construed to constitute such a
release.
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(vii) A new Section 6.14 is added as follows:
Section 6.14. Inactive Borrowers. Unless the
Borrowers have elected pursuant to Section 5.13 to return such
Inactive Borrowers to good standing, transfer assets or
liabilities to the Inactive Borrowers or cause any such
Inactive Borrowers to generate accounts receivable.
(b) The Note 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:
The following definition contained in Section 1(ix) of the
Note is amended and restated in full to read as follows:
(ix) "Termination Date" means January 15, 1998.
SECTION 2. 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 hereof shall become effective
when, and only when, the Bank shall have additionally received all of the
following documents, each document (unless otherwise indicated) being dated the
date of receipt thereof by the Bank (which date shall be the same for all such
documents), in form and substance satisfactory to the Bank and the Guarantor:
(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 Senior Debt (as defined in the Intercreditor
Agreement) concerning the matters covered by this Amendment, which shall include
an amendment to the Senior Debt (as defined in the Intercreditor Agreement)
documents extending the maturity date thereof to January 2, 1998, (iv) an
executed copy of that certain memorandum Re: Terms and Conditions Addendum for
Contract Extension to U.S. HomeCare Receivables Purchasing Program, dated March
12, 1997, by and between The Chase Manhattan Bank and the Parent, and (v)
management-prepared financial statements as of December 31, 1996.
(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 as to such other
matters as the Bank or the Guarantor 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.
(iii) All conditions to the effectiveness of Section
1 of Amendment No. 3 to the Restated First Credit Agreement
with the Senior Lenders, a certified copy of which shall have
been provided to the Bank as provided above, have been
satisfied and that Section 1 is effective.
(e) A fully executed amendment to the Guarantee extending
the termination date thereof to a date no
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(f) Payment of a $15,000 extension fee to the Bank, which
shall be fully earned by the Bank 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.
(b) The Dissolved Borrowers, on their respective dates of
dissolution, possessed no material assets and no material liabilities. The
Inactive Borrowers possess no material assets and no material liabilities. None
of the Dissolved Borrowers or the Inactive Borrowers generate accounts
receivable.
(c) 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 or hereafter acquired by such Borrower, or (iii)
to the best of such Borrower's knowledge, any law.
(d) 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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,
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
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shall remain in full force and effect and are hereby ratified and confirmed.
Without limitation to the foregoing, each of the Borrowers hereby confirms that
the removal of the Dissolved Borrowers from the Borrowers hereunder shall not
affect its obligations under the Credit Agreement and the other Facility
Documents, which are continuing obligations of such Borrower. Without limiting
the generality of the foregoing, the Pledge Agreement 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.
(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 5. 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 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 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 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 Connecticut.
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:________________________________________________
Name:
Vice President of each of the above corporations
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Bank:
FLEET NATIONAL BANK (successor by merger to
Fleet Bank, National Association)
By:_________________________________
Xxxxxxxxxxx X. Xxxx
Vice President
CONSENT OF GUARANTOR
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_______________________________________
Xxxxxxx X. Xxxxxxxxx
Vice President and Senior Loan Officer
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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 MEDICAL EQUIPMENT CORP., U.S. HOMECARE INFUSION
THERAPY PRODUCTS CORPORATION, U.S. HOMECARE INFUSION THERAPY SERVICES
CORPORATION OF CONNECTICUT, U.S. HOMECARE CORPORATION OF THE MIDATLANTIC REGION,
U.S. HOMECARE CORPORATION OF MICHIGAN
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SCHEDULE 1(a)(vi)
DISSOLVED BORROWERS
Florida Corporations:
U.S. Homecare Corp. of South Florida
U.S. Homecare Certified Corp. of Florida
U.S. Homecare Infusion Therapy Corp. of Florida
California Corporation:
U.S. Homecare Corporation of California
