1
AMENDMENT NO. 1
Dated as of November 14, 1996
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 (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 $3,000,000.00, 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 nor 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. 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:
(a) The following new definition is added in proper alphabetical
order to Section 1.1 of the Credit Agreement:
"EBITDA" shall mean, for any Person, for any period, earnings
before Interest Expense, taxes, depreciation, amortization and extraordinary
items for such period of such Person determined in accordance with GAAP.
(b) Section 7.1 is amended and restated in its entirety to read
as follows:
2
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.
(c) Subsection (l) of Section 5.8 is amended and restated in its
entirety to read as follows:
(l) as soon as available, and in any event within 25 days of
the end of each calendar month, (i) a certificate, and (ii) computations
demonstrating compliance with the covenant contained in Section 7.1 each
certified by the Borrowers' chief financial officer as of the close of business
as of the end of such month and after giving effect to all transactions
occurring on such day under the Sale Agreement;
(d) Subsection (n) of Section 5.8 is amended and restated in its
entirety to read as follows:
(n) immediately upon the request of the Bank or the
Guarantor from time to time (but not more often than once per calendar month for
the month just ended) and in no event later than 2 Banking Days following any
such request, a list setting forth the names and addresses of all account
debtors, an aging schedule with respect to Receivables classified according to
the names of all account debtors, an aging schedule with respect to accounts
payable, a reconciliation of Receivables and loan reconciliations, each
certified by the Borrowers' chief financial officer and in form and substance
satisfactory to the Bank and Guarantor.
(e) Section 5.8 is amended by deleting the word "and" at the end
of subsection (t), replacing the period (".") at the end of subsection (u) with
a semicolon (";") and the word "and" and adding the following new subsection (v)
at the end of Section 5.8:
(v) as soon as available and in any event within 45 days
after the end of each month of each fiscal year of the Borrowers, consolidated
balance sheets of the Borrowers and their Consolidated Subsidiaries as of the
end of such month and consolidated income statements of the Borrowers and their
Consolidated Subsidiaries for the period commencing at the end of the previous
fiscal year and ending with the end of such month, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date and period in the previous fiscal year and all prepared in
accordance with GAAP and certified by the chief financial officer of each
Borrower (subject to year-end adjustments).
(f) Section 8.1 is amended by deleting the word "or" at the end
of subsection (n), replacing the period (".") at the end of subsection (o) with
a semicolon (";") and adding the following new Events of Default at the end of
Section 8.1:
-2-
3
(p) at any time prior to the Termination Date, any of the
turnaround consultants providing consulting services to the Borrowers as of
October 31, 1996 shall no longer be providing such consulting services; or
(q) the Borrowers shall pay more than $100,000 in the aggregate
with respect to the services provided by Xxxxxxx Xxxxxx Xxxxx Inc. in connection
with the Asset Purchase Agreement dated as of October 31, 1996 among U.S.
HomeCare Infusion Therapy Services Corporation of New Jersey, the Parent and
Transworld Acquisition Corp.
SECTION 2. Waivers. Effective as of September 30, 1996, and subject to
the satisfaction of the conditions precedent set forth in Section 3 hereof, the
Bank hereby waives any Default or Event of Default due to the Borrowers' failure
to comply with (i) the covenant contained in Section 7.1 of the Credit Agreement
for the fiscal quarter ending September 30, 1996, and (ii) the covenant
contained in Section 7.4 of the Credit Agreement for the fiscal quarters ending
September 30, 1996 and December 31, 1996.
SECTION 3. 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 consent hereto executed by the
Guarantor, except that Sections 1 and 2 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
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, and (iii) all waivers and amendments with respect to the Senior Debt (as
defined in the Intercreditor Agreement) concerning the matters covered by this
Amendment.
(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) Payment of a $10,000 fee to the Bank.
SECTION 4. Representations and Warranties of the Borrowers. Each
Borrower represents and warrants as follows:
(a) Such Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation.
-3-
4
(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 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) 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, except as set forth in Schedule 4(f)
hereto.
(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 5. Reference to and Effect on the Facility Documents.
(a) Upon the effectiveness of Sections 1 and 2 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.
-4-
5
(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 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, 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 grant the waivers contained in
this Amendment. The Bank's granting of such waivers 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 6. 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 6. 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 7. 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 when taken together shall constitute but one and
the same instrument.
SECTION 8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
-5-
6
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
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:______________________________________
Xxxxx X. Xxxxxxxxx
Vice President and Senior Loan Officer
-6-
7
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 CORP. OF SOUTH FLORIDA, U.S. HOMECARE
CERTIFIED CORP. OF FLORIDA, U.S. HOMECARE INFUSION THERAPY CORP OF FLORIDA, U.S.
HOMECARE CORPORATION OF THE MIDATLANTIC REGION, U.S. HOMECARE CORPORATION OF
MICHIGAN, U.S. HOMECARE CORPORATION OF CALIFORNIA
-7-
