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EXHIBIT 10.36
FIRST AMENDMENT TO GUARANTEE AGREEMENT
THIS FIRST AMENDMENT TO GUARANTEE AGREEMENT (the "First Amendment") is
entered into as of the 25th day of March, 1997, by and between the Connecticut
Development Authority, a body politic and corporate, constituting a public
instrumentality and political subdivision of the State of Connecticut with its
principal office at 000 Xxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxxx 00000 (the
"Authority"), and Fleet National Bank (successor by merger to Fleet Bank,
National Association), a national banking association with an office at 000 Xxxx
Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 ("Lender").
RECITALS
WHEREAS, on or about October 6, 1995, Lender entered into a certain
Credit Agreement with U.S. HomeCare Corporation, a New York corporation, and its
consolidated Subsidiaries which were signatory parties thereto (collectively,
the "Borrower"), pursuant to which Lender agreed to make available to the
Borrower certain revolving credit loans in an amount of up to $3,000,000.00 with
a maturity date of April 15, 1997 (the "Credit Agreement"); and
WHEREAS, on or about October 6, 1995, the Authority executed and
delivered to Lender a Guarantee Agreement pursuant to which the Authority agreed
to guarantee an amount of up to $3,000,000.00 of the aggregate loans from time
to time outstanding under the Credit Agreement (the "Guarantee Agreement"), as
more fully described in Section 8 of the Guarantee Agreement; and
WHEREAS, on or about November 14, 1996, Lender and Borrower entered
into Amendment No. 1 to the Credit Agreement pursuant to which certain terms and
conditions of the Credit Agreement were amended; and
WHEREAS, on the effective date hereof, Lender and the Borrower have
entered into Amendment No. 2 to the Credit Agreement pursuant to which the
maturity date of such loans has been extended to January 15, 1998; and
WHEREAS, the Credit Agreement, as amended by Amendment No. 1 and
Amendment No. 2 thereto, is herein referred to as the "Amended Credit
Agreement"; and
WHEREAS, the Authority is willing to enter into this First Amendment
with Lender to evidence the terms and conditions of its guarantee of the loans
made available by Lender to the Borrower under the terms of the Amended Credit
Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. The capitalized terms used in this First Amendment
shall have the same meanings as in the Guarantee Agreement unless the context
hereof otherwise provides.
2. Amendments to Guarantee Agreement. From and after the date of this
First Amendment, the Guarantee Agreement shall be amended as follows:
2.1 The following definitions set forth in Section 1 of the Guarantee
Agreement shall be amended in their entirety to hereafter read as follows:
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"'Commitment' shall mean the Authority's commitment letters dated
September 14, 1995 and March 21, 1997, setting forth the conditions to the
issuance of its Guarantee of the Lender Loan, and the terms of such Guarantee.
'Guarantee' shall mean the Guarantee Agreement as amended by this First
Amendment."
2.2. Section 8 of the Guarantee Agreement, entitled "Guarantee Amount",
shall be amended in its entirety to hereafter read as follows:
"Section 8. Guarantee Amount
The Guarantee Amount at any given time shall be equal to the
aggregate sum of $3,000,000.00 minus the total of all payments theretofore made
by the Authority under this Guarantee. Upon any payment by the Authority under
this Guarantee, the Guarantee Amount shall be immediately and automatically
reduced by the amount of such payment, except that the Guarantee Amount may be
reinstated as provided in Section 9 hereof. NOTWITHSTANDING THE FOREGOING, THE
GUARANTEE AMOUNT SHALL, AUTOMATICALLY REDUCE TO ZERO AND THIS GUARANTEE SHALL
TERMINATE ON JANUARY 31, 1998, UNLESS PRIOR TO SUCH DATE LENDER HAS DELIVERED TO
THE AUTHORITY UNDER SECTION 9 HEREOF A NOTICE OF DEFAULT OR A NOTICE THAT
BORROWER HAS FAILED TO MAKE A PAYMENT UNDER THE LENDER LOAN DOCUMENTS ON DEMAND
OF LENDER."
2.3 Section 17.3 of the Guarantee Agreement shall be amended in its
entirety to hereafter read as follows:
"17.3 To induce the Authority to enter into this Guarantee in favor
of Lender, the Borrower hereby agrees and covenants to maintain "Total
Employment" (as defined below) in the State of Connecticut in the aggregate
amounts set forth below for the corresponding calendar year;
Year Total Employment
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1997 200
1998 200
As used herein, the term "Total Employment" for such calendar year of
determination, shall mean and refer to the four quarter average of the
Borrower's full-time employees employed by the Borrower in the State of
Connecticut as reflected on the Borrower's Connecticut Employee Quarterly
Earnings Report, Form UC-5a, submitted by the Borrower on a quarterly basis to
the State of Connecticut Department of Labor, with respect to each calendar
quarter of the Borrower (the "Connecticut Quarterly Employment Report"). The
Borrower shall submit to the Authority a copy of each Connecticut Quarterly
Employment Report filed by the Borrower within thirty (30) days after the end of
each calendar quarter hereafter, beginning with the calendar quarter ending
September 30, 1995. If Borrower fails to achieve and maintain Total Employment
for such calendar year as set forth above (based on an annual average of the
four Connecticut Quarterly Employment Reports submitted to the Authority in
connection with this Section 17.3), then the Borrower shall pay to the
Authority, in addition to any and all other fees, costs and expenses provided
for in this Guarantee, an additional fee in an amount described below, based on
the difference between the Borrower's actual Total Employment in the State of
Connecticut for such
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calendar year and the Borrower's projected Total Employment as set forth above
(the "Employment Shortfall"), as follows:
Amount of Employment Shortfall Amount of Fee
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1 - 4 $3,850.00
5 - 8 $7,695.00
9 - 12 $11,540.00
13 - 16 $19,230.00
17 and above $23,075.00
Such additional fee shall be due and payable to the Authority by the Borrower
upon demand by the Authority. The Authority shall furnish to the Borrower a
written calculation of the Borrower's Employment Shortfall for the subject
calendar year simultaneously with its demand for payment of the corresponding
shortfall fee. The Failure of the Borrower to pay such fee to the Authority
within thirty (30) days after written demand by the Authority shall be deemed to
constitute an Event of Default under the Lender Loan Agreement."
2.4 Section 13 of the Guarantee Agreement, entitled "Fees and Expenses
of Authority", shall be amended to provide that the following fees are to be
paid by the Borrower to the Authority on or before the date of this First
Amendment: (i) a commitment fee of $15,000.00; (ii) a guarantee fee of
$30,000.00; and (iii) a fee of $60,000.00 for failure to achieve the "Total
Employment" parameters set forth in Section 17.3 of the Agreement for the
calendar year ending December 31, 1996.
3. Effect of this First Amendment. Except as otherwise amended hereby,
the terms of the Guarantee Agreement shall remain in full force and effect. The
rights, privileges, duties and obligations of the parties under the Guarantee
Agreement shall, except as modified by this First Amendment, remain unchanged
and in full force and effect.
4. Governing Law. This First Amendment is made, executed and delivered
in the State of Connecticut and it is the specific intent of the parties hereto
that it shall be in all respects be construed under the laws of the State of
Connecticut.
5. Entire Agreement. This First Amendment sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements between the parties, written or oral,
specifically relating to such matters.
6. Binding Effect. This First Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, the parties hereto, by their duly authorized
officers, have executed this First Amendment as of the date first above written.
CONNECTICUT DEVELOPMENT AUTHORITY
By:__________________________________________
Xxxxxxx X. Xxxxxxxxx
Its Vice President and Senior Loan Officer
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FLEET NATIONAL BANK
(successor by merger to Fleet Bank, National Association)
By:______________________________________________________
Xxxxxxxxxxx X. Xxxx
Its Vice President
Acknowledged and agreed to as of the ____ day of March, 1997;
U.S. HOMECARE CORPORATION AND ITS CONSOLIDATED SUBSIDIARIES LISTED ON SCHEDULE 1
HERETO
By:_______________________________
Xxxxxx X. Xxxxxxxx, Xx.
Its Chief Financial Officer
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SCHEDULE I
New York Corporations:
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 Medical Equipment Corp.
U.S. Homecare Infusion Therapy Products Corporation
Pennsylvania Corporations:
U.S. Homecare Corporation of Pennsylvania
U.S. Homecare Certified Corporation of Pennsylvania
Connecticut Corporations:
U.S. Homecare Corporation of Connecticut
U.S. HomeCare Infusion Therapy Services Corporation of Connecticut
U.S. Homecare Certified Corporation of Connecticut
Maryland Corporation:
U.S. Homecare Corporation of the MidAtlantic Region
Michigan Corporation:
U.S. Homecare Corporation of Michigan
New Jersey Corporation:
U.S. Homecare Infusion Therapy Services Corporation of New Jersey
